Palladium Futures Reach 2-Year High
The palladium futures reached a new 2-year high in the past trading week, after the price increased by an impressive 12.38% and closed at 1,289 USD per ounce. This marks the highest level since August 2023.
Causes of the Price Increase
The significant rise was largely triggered by the escalation of international trade conflicts. President Trump’s announcement of new tariffs on Canadian imports and blanket tariffs for other trading partners have heightened the geopolitical climate. In this environment, palladium proves to be a safe haven.
Production Concentration as a Risk
Another factor is the concentration of palladium production, which comes 40% from Russia and South Africa. This dependency makes the market vulnerable to political tensions, especially given the strained US-Russia relations.
Development of Demand
Despite the price increase, there are also contrary opinions: demand from the automotive industry, a major consumer of palladium, is declining. Experts therefore expect a more moderate price trend, as an oversupply could arise when more recycled material becomes available.
In summary, the current price increase of palladium futures shows a strong reaction to geopolitical tensions with a risk of further price volatility. Investors should keep an eye on both political developments and demand trends.