FX.co ★ Palladium Extends Losses

Palladium futures slipped to around $1,350 per ounce, extending losses for a second straight session after recently touching three-month highs. The metal came under pressure from a stronger US dollar and higher Treasury yields, following hawkish comments from Federal Reserve Chair Kevin Warsh. Expectations for a September rate hike also intensified, with investors awaiting key US labor market indicators — including the ADP employment report and nonfarm payrolls — for further guidance on the Fed’s policy trajectory.

At the same time, rising oil prices amid mounting tensions in the Strait of Hormuz boosted inflation expectations, adding further headwinds for palladium. The metal dropped more than 4.3% on Monday after Warsh indicated that policymakers may need to act more aggressively if inflation does not move back toward the Fed’s 2% target. On the supply side, constrained mine output in major producing regions continued to offer some support, but supply concerns were overshadowed by broader macroeconomic pressures.