Palladium prices advanced on Monday despite a slight uptick in the US dollar against most major currencies, as markets closely awaited the Federal Reserve’s policy decision.

A series of major central-bank meetings is scheduled this week, with the Fed at the forefront. Expectations point toward an interest-rate cut.

UBS last month raised its palladium price forecasts by $50 per ounce across all time horizons, citing expectations that the market will remain in a mild supply deficit through next year.

The bank noted that sentiment in the options market remains moderately positive, though now closer to neutral than at the start of the year.

The implied-volatility skew between call and put options for one- to six-month maturities currently stands between 1.8% and 2.4%, down from peaks of 3.4% to 9.1% earlier in the year.

UBS said the earlier surge in optimism — from early November 2024 to late January 2025 — was driven by fears of potential new sanctions targeting Russian palladium exports.

Russia accounts for roughly 40% of global mine supply, but continued flows of Russian metal into the market have eased concerns over supply disruption.

Short-term price volatility will largely hinge on the outcome of the US Commerce Department’s Section 232 investigation into critical minerals, as well as an anti-dumping petition filed by Sibanye and the United Steelworkers union.

Market participants are awaiting a decision from the US administration on whether to impose tariffs on palladium imports.

Despite raising its price target, UBS said it sees stronger upside potential in other precious metals, even though palladium is likely to remain in a mild deficit through 2026.

The US Dollar Index edged up 0.1% to 99.1 by 15:09 GMT, after trading between 98.7 and 99.1.

Palladium futures for March delivery rose 1.8% to $1,530.1 per ounce at 15:09 GMT.

Bitcoin rose on Monday, rebounding from a slight weekly decline as investors held to expectations that the Federal Reserve will cut interest rates this week.

Gains remained limited as market participants stayed cautious, following mixed signals from policymakers that have tempered enthusiasm.

The world’s largest cryptocurrency climbed 2.2% to trade at $91,398.6 by 02:08 ET (07:08 GMT).

Bitcoin recovered part of last week’s drop below $84,000 — a pullback that, after heavy losses in November, has kept investors on alert.

Rate-cut expectations this week

Rate-cut bets remain intact after a run of softer US economic data in recent weeks. Markets are pricing in an 87% chance of a 25-basis-point cut at the Fed meeting ending December 10, helped by moderating inflation indicators.

The Fed’s preferred inflation gauge — core PCE — rose 0.2% in November, while the annual increase slowed to 2.8%, reinforcing the view that inflation pressures are easing sustainably.

Lower rates generally support risk-sensitive assets such as cryptocurrencies, though traders remain wary. Conflicting comments from Fed officials have created uncertainty around the pace and scale of potential easing in 2026.

Bitcoin began a strong rally late in 2024 as expectations built for a shift in Fed policy. Historically, lower interest rates weaken the dollar and enhance the appeal of non-yielding assets like Bitcoin — a setup that could support further gains if disinflation persists.

Markets now turn to the Fed’s policy statement and Chair Jerome Powell’s comments later this week.

Crypto prices today: altcoins rise within tight ranges

Most major altcoins advanced alongside the broader market, though they remained in narrow trading ranges.

Ethereum rose 3% to $3,127.92

XRP added 2.5% to $2.08

Oil prices fell on Monday as investors monitored ongoing negotiations to end the war in Ukraine, ahead of an expected interest-rate cut by the US Federal Reserve this week.

Brent crude futures dropped $0.57, or 0.9%, to $63.18 a barrel by 10:53 GMT, while US West Texas Intermediate declined $0.60, or 1%, to $59.48 a barrel.

Both benchmarks had settled Friday at their highest levels since 18 November.

Thomas Varga, oil market analyst at PVM, said: “If any agreement on Ukraine is reached in the near future, Russian oil exports are expected to increase, which could push prices lower.”

Federal Reserve decision in focus

LSEG data shows markets pricing in an 84% chance of a 25-basis-point rate cut at the Fed’s Tuesday–Wednesday meeting. However, comments from several Fed officials suggest the gathering is likely to be one of the most divided in years, heightening investor attention on policy direction and internal dynamics.

Slow progress in Ukraine talks

In Europe, peace negotiations over Ukraine remain slow, with continued disagreements on Kyiv’s security guarantees and the status of Russian-held territories. US and Russian officials also diverge on the proposal put forward by the administration of President Donald Trump.

Ukrainian President Volodymyr Zelensky is set to meet European leaders in London on Monday.

ANZ analysts wrote in a client note: “The potential outcomes of Trump’s latest initiative to end the war could shift oil supply by more than two million barrels per day.”

Vivek Dhar, analyst at Commonwealth Bank of Australia, said a ceasefire poses the biggest downside risk to price forecasts, while ongoing damage to Russian oil infrastructure remains a key upside factor.

“We believe oversupply concerns will eventually materialize, especially as Russian oil and product exports continue to circumvent current sanctions, moving futures gradually toward $60 a barrel by 2026,” Dhar wrote.

Potential new restrictions on Russian exports

Meanwhile, G7 nations and the European Union are considering replacing the current price cap on Russian oil exports with a full ban on maritime services, according to sources cited by Reuters — a step that could constrain supply from the world’s second-largest producer.

The United States has also increased pressure on Venezuela — an OPEC member — by launching strikes against vessels it said were attempting to smuggle illegal drugs, in addition to signaling potential military action aimed at removing President Nicolás Maduro.

Separately, independent refiners in China have increased purchases of sanctioned Iranian oil from onshore storage, relying on new import quotas, according to traders and analysts — a move that could help ease oversupply conditions.

The dollar slipped on Monday ahead of a packed week of central-bank meetings led by the US Federal Reserve, with a rate cut now fully priced in by markets, even as deep divisions inside the policy committee leave the final outcome uncertain.

Alongside Wednesday’s Fed decision, Australia, Brazil, Canada, and Switzerland will also set policy this week, though none are expected to make changes to their current rate settings.

Analysts expect the Fed to deliver what is being called an “aggressive cut,” in which the statement tone, the Summary of Economic Projections, and Chair Jerome Powell’s press conference collectively set tougher conditions for any further easing next year.

Such messaging could support the dollar if it forces investors to dial back expectations for two or three additional cuts in 2026 — though communication may prove complicated given the clear split among policymakers, with several members already signaling their voting intentions.

Significant risks from dissent within the committee

Bob Savage, head of macro strategy at BNY, wrote in a note to clients: “We expect to see dissent from both hawks and doves.”

The Federal Open Market Committee has not seen three or more dissents in a single meeting since 2019, and this has happened only nine times since 1990.

Despite the dollar’s decline over the past three weeks, bullish sentiment has rebounded. Positioning data shows speculative traders holding their largest net-long dollar positions since before former President Donald Trump’s tariff shock that sent the currency lower.

And while the labor market continues to cool, economic growth remains solid, with fiscal stimulus from the “one big beautiful bill” expected to build gradually in the coming months. Inflation also remains well above the Fed’s 2% target.

“These factors could dissuade the Fed from delivering further cuts if they translate into renewed labor-market strength,” said Lee Hardman, currency strategist at MUFG.

Euro supported by rising yields

The euro rose 0.1% to $1.1652, lifted by higher eurozone bond yields. Germany’s 30-year bund yield touched its highest level since 2011 in early trading.

Unlike the Fed, the European Central Bank is not expected to cut rates next year. Influential board member Isabel Schnabel said Monday that the bank’s next move could, in fact, be a hike.

The Australian dollar climbed to its strongest level since mid-September at $0.6649 before trimming gains to trade down 0.1% at $0.6635.

The Reserve Bank of Australia meets Tuesday following a string of strong prints on inflation, growth, and household spending. Interest-rate futures now suggest the next move could be a hike — possibly by May — making the post-meeting statement and press conference the main focus.

“We expect the bank to remain on hold for an extended period, keeping the cash rate at 3.60%,” ANZ analysts wrote last week after revising their forecasts.

Canada set to hold steady

The Bank of Canada is widely expected to leave rates unchanged on Wednesday, while markets fully price in a hike by December 2026. The Canadian dollar held at C$1.3819 per US dollar after touching a 10-week high Friday on the back of strong jobs data.

The yen steadied at ¥155.44 per dollar after sharp losses in November, the British pound held near $1.3325, and the Swiss franc edged higher to CHF 0.804 per dollar.