FX.co ★ Palladium Extends Losses

Palladium futures slipped to around $1,260 per ounce, remaining under pressure as the US dollar hovered near a one‑month high and investors awaited the Federal Reserve’s policy decision. The Fed is widely expected to leave interest rates unchanged, with markets pricing in roughly a 70% probability of a pause and a 30% chance of a 25‑basis‑point hike, while still anticipating another increase in September.

The stronger dollar has made dollar‑denominated metals more expensive for overseas buyers, weighing on palladium prices. Geopolitical tensions in the Middle East have provided only limited support, even as markets track developments in the Strait of Hormuz following Iran’s missile strikes on US forces and new proposals from Gulf states for a framework to manage the vital shipping corridor.

On the fundamentals side, palladium continues to face headwinds from softening automotive demand. Rising electric‑vehicle adoption and ongoing substitution of palladium with platinum in autocatalysts are curbing consumption. Despite the recent pullback, palladium is up 4.75% over the past month and 3.26% compared with a year earlier.