Palladium prices fell during Thursday’s trading, amid a stronger dollar against most major currencies, in addition to profit-taking sales.

With strong demand for platinum group metals (PGMs) continuing, the global research division at Bank of America Securities raised its 2026 platinum price forecast to $2,450 per ounce from a previous estimate of $1,825, and also lifted its palladium forecast to $1,725 per ounce from $1,525.

Key takeaways from the bank’s weekly Global Metals Markets report dated January 9 showed that trade-related disruptions to PGM flows continue to keep markets tight, particularly the platinum market. The report also noted that China’s platinum imports are providing additional price support.

Although a supply response is likely, the bank expects it to be gradual, citing what it described as “production discipline and mine supply inelasticity.”

These forecasts come as platinum and palladium prices continue to rise this year, with spot prices reaching $2,446 per ounce for platinum and $1,826 per ounce for palladium.

As a result, both metals have exceeded the bank’s previous forecasts, prompting it to revise its price estimates upward.

In a statement to Mining Weekly, the bank said: “We continue to expect platinum to outperform palladium, supported by persistent market deficits.”

The bank explained that US tariffs have had a clear impact on several metals markets, and that the risk of additional tariffs continues to loom over PGMs.

This has been one of the factors behind rising inventories at the Chicago Mercantile Exchange, alongside a surge in exchange-for-physical (EFP) transactions.

Palladium EFP activity recorded stronger performance, driven largely by growing concerns that the United States could impose tariffs on Russian palladium, amid ongoing anti-dumping and countervailing duty investigations.

In this context, the bank said the US Department of Commerce had estimated the dumping margin for unwrought Russian palladium at around 828%.

The bank noted that imposing tariffs on as-yet undisclosed Russian volumes could push domestic prices higher, given that Russia is a major supplier of palladium.

Chinese import demand boosts price support

Outside the United States, China has provided additional support to prices. Early in 2025, a sharp recovery in jewelry sector activity attracted more ounces into the Chinese market. With gold prices at record highs, this development is particularly significant, as substituting just 1% of gold jewelry demand could increase the platinum deficit by around one million ounces, equivalent to nearly 10% of total supply.

In the second half of 2025, the launch of physically backed platinum and palladium futures contracts on the Guangzhou Futures Exchange (GFEX) provided further support to prices.

These contracts represent China’s first domestic hedging instruments for PGMs denominated in renminbi, and they allow for physical delivery of both bars and sponge metal. The bank said that the availability of physical liquidity was a key driver behind the price rally seen in December.

China’s palladium imports have also quadrupled since September compared with last year, which the bank described as difficult to explain fundamentally given the ongoing phase-out of internal combustion engines, suggesting the increase is largely linked to the launch of palladium futures contracts on the Guangzhou exchange.

Gradual supply response expected

With PGM prices now trading above marginal production costs and incentive prices for investment, markets are closely watching for a supply response.

The bank said: “We expect any response to be measured. Producer margins — particularly in South Africa and North America — have been under sustained pressure over the past two years, which may encourage caution in expanding output.”

As for new supply, increases are likely to emerge only gradually, given the long lead times required to move from development to stable production levels.

Many ongoing projects represent incremental expansions or phased increases in output, rather than sources of large and rapid supply growth.

On the supply side, production issues in South Africa tightened the platinum market in 2025. Mine output in the country fell by about 5% year on year between January and October 2025, mainly due to operational problems such as flooding and plant maintenance in the first quarter. The bank expects a modest recovery in South African platinum production this year, but not enough to eliminate the market deficit.

In Russia, the world’s largest palladium supplier, output also faced challenges as Norilsk Nickel transitioned to new mining equipment and experienced changes in ore composition. As a result, the company’s platinum output fell by 7% and palladium output by 6% year on year during the first nine months of 2025. As these temporary disruptions fade, Russian PGM production is expected to recover this year, potentially limiting the pace of palladium price gains.

While high prices can incentivize higher supply, the bank believes additional volumes are more likely to come from mine life extensions and project restarts, rather than rapid and large-scale capacity expansions.

In practice, most new supply requires several years to move from construction to full production, and many projects currently under development are incremental or phased expansions rather than immediate sources of large additional volumes.

The bank noted that two major new projects moving toward production — Ivanhoe Mines’ Platreef project and Wesizwe’s Bakubung project in South Africa — are expected to add a combined 150,000 ounces of platinum and 100,000 ounces of palladium during the current year.

Other expansion projects remain longer-dated and dependent on final investment decisions. Among them is Valterra Platinum’s Sandsloot underground project at the Mogalakwena mine, which is not expected to reach an investment decision before 2027, with underground ore extraction potentially starting after 2030.

Meanwhile, the dollar index rose by 0.2% to 99.3 points by 16:04 GMT, hitting a high of 99.4 and a low of 99.09.

In trading, March palladium futures fell by 3.3% at 16:05 GMT to $18415 per ounce.

Bitcoin rose on Thursday, extending its recent recovery as markets assessed a proposed US bill aimed at establishing a regulatory framework for the cryptocurrency sector.

The world’s largest digital currency resumed gains after a slow start to the year, following a disclosure by Strategy, the largest institutional holder of Bitcoin, of a major purchase this week. However, Bitcoin remained below the key psychological level of $100,000, as pressure on risk appetite toward digital assets persisted.

Bitcoin rose 1.4% to $96,370.1 by 00:05 US East Coast time (05:05 GMT), marking its strongest level in two months.

US Senate delays cryptocurrency bill after Coinbase opposition

The US Senate Banking Committee said on Wednesday that it had postponed discussions on a proposed bill to regulate cryptocurrencies, just hours after Brian Armstrong, Chief Executive Officer of Coinbase Global, voiced opposition to the measure.

Senator Tim Scott said in a post on social media that the discussion of the bill, which had been scheduled for Thursday, was delayed.

In an earlier post on Wednesday, Armstrong criticized the bill, saying Coinbase could not support it in its current form.

Armstrong took issue with several provisions in the proposal, including a suggested ban on tokenized equities, restrictions on decentralized finance, a reduction in the oversight role of the Commodity Futures Trading Commission, as well as “draft amendments that would eliminate stablecoin rewards.”

Armstrong said: “This version is far worse than the status quo. We would rather have no law at all than pass a bad law,” criticizing the bill despite its bipartisan backing.

Coinbase was among the largest donors during the 2024 US election cycle to crypto-supportive entities, and is a key party in negotiations surrounding the bill, given that it is the largest cryptocurrency trading platform in the United States.

The cryptocurrency industry has long called for a comprehensive regulatory framework, seeking clarity on whether digital assets should be classified as securities or commodities.

Cryptocurrency prices today: altcoins lag as risk appetite remains weak

Other cryptocurrency prices lagged Bitcoin’s gains and remained under pressure amid continued weakness in overall market risk appetite.

Global geopolitical tensions remain elevated, as investors watch for any potential additional US intervention in Venezuela and Iran.

Despite Bitcoin’s recovery, it continued to trade at a discount in US markets, particularly on Coinbase, compared with global averages. This trend, which has persisted since mid-December, points to continued weakness in retail investor demand.

Among altcoins, Ether, the world’s second-largest cryptocurrency, fell 0.6% to $3,312.22. XRP declined by 2.4%, while BNB slipped by 0.5%.

Oil prices fell by more than 3% on Thursday after US President Donald Trump said that the killing of protesters during demonstrations in Iran had begun to subside, easing concerns about potential military action against Iran and the risk of disruptions to oil supplies.

Brent crude futures dropped by $2.19, or 3.3%, to $64.33 a barrel by 12:21 GMT. US West Texas Intermediate crude also fell by $2.06, or 3.3%, to $59.96 a barrel, after having lost as much as 4.6% earlier in the session.

Trump said he had been informed that killings linked to the crackdown on protests in Iran had started to decline, and that he believed there were currently no plans for mass executions, adopting a “wait-and-see” stance after previously hinting at the possibility of intervention.

Analysts noted that these remarks reduced the risk premium that had built up in markets over recent days. Brent crude had reached $66.82 a barrel on Wednesday, its highest level since September.

Ole Hansen, Head of Commodity Strategy at Saxo Bank, said: “While the situation remains fragile, the immediate risk premium has eased, but it is unlikely to disappear completely given the ongoing risk of supply disruptions.”

In a related development, a US official said on Wednesday that the United States had begun withdrawing some of its personnel from military bases in the Middle East, after a senior Iranian official said Tehran had informed neighboring countries that it would target US bases if Washington launched an attack.

Prices also came under further pressure after data from the US Energy Information Administration showed that US crude oil and gasoline inventories rose by more than expected last week.

In another development, three sources said Venezuela has begun rolling back oil production cuts it had imposed under US sanctions, as crude exports resumed.

On the demand side, the OPEC said on Wednesday that oil demand in 2027 is likely to rise at a pace similar to this year, and published data indicating that supply and demand are nearing balance in 2026, in contrast to other forecasts that point to a supply surplus.

Government data showed that China’s crude oil imports rose by 17% year on year in December, while total imports in 2025 increased by 4.4%, with average daily oil imports reaching record levels.

The British pound edged slightly lower against the dollar on Thursday before trimming some of its losses, after economic data showed that the UK economy grew more strongly than expected in November. However, the data had little impact on monetary policy expectations.

Market participants have priced in interest rate cuts by the Bank of England totaling around 40 basis points by next September.

UK gross domestic product recorded its fastest pace of growth since June, supported by Jaguar Land Rover returning to full production capacity following a cyberattack that had affected the carmaker and its supply chains.

Callum Pickering, Chief Economist at Peel Hunt, said: “Despite the positive surprise, it is important to note that the data are not strong by any means.”

He added: “Economic activity in the UK is, at best, lukewarm and volatile, and remains largely constrained by weak confidence in the policy decisions taken by the Labour government.”

The pound fell by 0.05% to $1.3443, after having been down about 0.10% before the data were released.

Meanwhile, the dollar rose as markets looked past concerns over the independence of the Federal Reserve and shifted their focus back toward economic data.

Andrew Wishart, an economist at Berenberg, said: “The broader picture still points to the UK economy having lost momentum since the summer.”

He added: “We expect this weak phase to persist into 2026 amid ongoing job losses and fiscal tightening,” noting that this backdrop could help bring inflation down and allow the Bank of England to cut interest rates more aggressively than markets currently expect.

Analysts said investors have begun to refocus on economic data after the support the pound had recently received from easing financial and political risks in the UK faded — factors that had bolstered the currency following Chancellor Rachel Reeves’ November budget announcement.

The next batch of UK consumer price inflation data is due to be released on January 21.

At the same time, the euro rose by 0.15% to 86.54 pence.

The release of China’s full-year 2025 trade data on Wednesday highlighted a sensitive issue for the UK — the risk of the British market being flooded with Chinese goods originally destined for the US market.

The data showed that Chinese goods exports to the UK rose by 7.8% year on year in 2025, while exports to the European Union increased by 8.4%.