Palladium prices fell on Friday despite a weaker US dollar against most major currencies and renewed optimism over easing trade tensions between the United States and China — factors that would typically support demand.

According to Capital.com, palladium has risen about 26% since the start of October to around $1,500 per ounce. This surge has coincided with gains in the platinum market and a general loosening of global financial conditions.

Expectations of US interest rate cuts and a softer dollar have also contributed to the metal’s rally, part of what analysts call the “Gold + Liquidity Wave” that has lifted precious metals broadly.

Palladium is used almost exclusively in catalytic converters for gasoline engines, meaning US car and electronics manufacturers could face sharp cost fluctuations.

Technical analysis from Monex indicates resistance between $1,500 and $1,520 per ounce, with forecasts suggesting that while the overall trend remains upward, trading is likely to stay volatile in the near term.

Analysts at CPM Group noted that palladium’s strength is “closely linked to platinum’s performance,” while cautioning that continued inflation and weakness in the US labor market could restrain demand growth.

Meanwhile, the US Dollar Index edged down less than 0.1% to 98.8 by 13:59 GMT, after touching a high of 99.1 and a low of 98.7.

At the same time, palladium futures for December delivery dropped 2.1% to $1,457.5 per ounce at 14:00 GMT.

Bitcoin climbed above $111,000 on Friday, heading for weekly gains after the White House confirmed that US President Donald Trump will meet Chinese President Xi Jinping next week — a move that eased fears of a prolonged trade war between the world’s two largest economies. Investors also awaited key US inflation data due later in the day.

The world’s largest cryptocurrency rose nearly 2% to $111,410 by 02:58 a.m. Eastern Time (06:58 GMT) and was set for a weekly gain of around 3% after two consecutive weeks of sharp losses.

Rally driven by Trump–Xi meeting confirmation

Bitcoin rebounded from early-week declines as traders welcomed signs of a potential thaw in US–China relations.

The White House confirmed Thursday that Trump and Xi will meet on the sidelines of the APEC summit in South Korea next week. The announcement followed weeks of escalating tariff threats and harsh rhetoric that had unsettled financial markets.

It also coincided with ongoing trade talks in Malaysia, where US Treasury Secretary Scott Bessent and Trade Representative Jamison Greer met Chinese Vice Premier He Lifeng in an effort to calm tensions before the leaders’ summit.

The negotiations aim to prevent a new round of tariffs — including Washington’s proposal for a 100% levy on Chinese imports — and address Beijing’s recent restrictions on rare-earth metal exports.

The easing of trade tensions boosted risk appetite across markets, lifting equities and cryptocurrencies, which have increasingly moved in tandem with shifts in investor sentiment.

Investors await US inflation data

Markets are now focused on the US Consumer Price Index (CPI) for September, due later Friday after a delay caused by the government shutdown. The report is expected to shed light on whether price pressures have eased enough to justify a Federal Reserve rate cut at next week’s policy meeting.

Trump pardons Binance founder

President Donald Trump granted a full pardon to Changpeng Zhao (CZ), the founder of cryptocurrency exchange Binance, who had been convicted of violating anti–money laundering laws.

White House spokesperson Karoline Leavitt confirmed the decision Thursday.

Zhao, a billionaire known by his initials “CZ,” pleaded guilty in late 2023 to one count related to his company’s failure to implement an effective anti–money laundering program. He served four months in prison as part of a settlement that required Binance to pay a $4.3 billion fine.

In a post on X (formerly Twitter), Zhao expressed “deep gratitude” for the presidential pardon, pledging to help “make America the crypto capital of the world.”

Other cryptocurrencies rise

Most altcoins also advanced on Friday, though they remained range-bound amid cautious sentiment.

Ethereum, the world’s second-largest cryptocurrency, rose 2.4% to $3,978.55; XRP gained 1.1% to $2.44; Solana climbed 3.2%; and Cardano added 1.6%.

Oil prices steadied on Friday after a sharp rally in the previous session but remained on track for weekly gains, as concerns over tighter supplies persisted following new US sanctions on Russia’s two largest oil producers over the war in Ukraine.

Brent crude futures slipped 10 cents, or 0.15%, to $65.89 a barrel by 09:59 GMT, while US West Texas Intermediate (WTI) futures fell 9 cents, or 0.15%, to $61.70.

Giovanni Staunovo, commodities analyst at UBS, said: “Everyone is waiting for signs of how the new sanctions will affect Russia. The market is in a holding pattern to see what happens to oil flows. Similar sanctions in the past have only caused temporary disruptions.”

Both benchmarks surged more than 5% on Thursday following the sanctions announcement and are heading for weekly gains of nearly 7%, their biggest since mid-June.

The six-month spreads for Brent and WTI returned to backwardation — where near-term contracts trade at higher prices than those for later delivery — after briefly slipping into contango earlier this week.

This shift signals that traders’ concerns have moved from oversupply to potential shortages, prompting them to sell oil at higher prices now rather than pay storage costs to sell later.

Washington imposes sanctions on key Russian oil companies

President Donald Trump on Thursday imposed sanctions on Russia’s Rosneft and Lukoil to pressure President Vladimir Putin to end the war in Ukraine. The two companies together account for more than 5% of global oil production.

Trade sources told Reuters that China’s state-owned oil giants have temporarily halted purchases of Russian crude following the sanctions, while Indian refiners — the largest buyers of Russian seaborne oil — are preparing to sharply reduce imports.

Yaniv Shah, Vice President of Oil Markets Analysis at Rystad Energy, wrote in a note to clients: “Flows to India face particularly high risks, while challenges for Chinese refiners are likely to be less severe given diversified sourcing and ample inventories.”

OPEC ready to offset any supply shortfall

Kuwait’s oil minister said the Organization of the Petroleum Exporting Countries (OPEC) stands ready to offset any potential shortfall in global supply by boosting production.

Meanwhile, the United States confirmed it is prepared to take further action, while Putin called the sanctions “an unfriendly act,” insisting they would not significantly harm Russia’s economy and stressing the country’s vital role in global energy markets.

Britain imposed similar sanctions on Rosneft and Lukoil last week, and the European Union approved its 19th sanctions package against Russia, including a ban on imports of Russian liquefied natural gas (LNG).

The EU also added two Chinese refining firms with a combined capacity of 600,000 barrels per day, along with China Oil Hong Kong — the trading arm of PetroChina — to its sanctions list, according to the EU’s official gazette released Thursday.

According to US energy data, Russia was the world’s second-largest crude producer in 2024, behind the United States.

Focus shifts to Trump–Xi meeting

Investors are also watching the upcoming meeting between President Donald Trump and Chinese President Xi Jinping next week, as both sides seek to ease long-standing trade tensions and end a series of retaliatory measures that have weighed on global growth.

The US dollar held steady on Friday but remained on track for modest weekly gains against major currencies, as investors awaited delayed US inflation data that is unlikely to deter the Federal Reserve from cutting interest rates next week.

Trade war concerns resurfaced after President Donald Trump announced that all trade talks with Canada had been canceled, following what he called a “fraudulent broadcast” from Ontario featuring former President Ronald Reagan speaking negatively about tariffs.

The Canadian dollar dipped slightly to 1.4008 per US dollar, though the market reaction was relatively muted, with investor focus turning to next week’s anticipated meeting between Trump and Chinese President Xi Jinping.

Hopes for progress in Trump–Xi talks

The meeting, set to take place in South Korea, has raised hopes for a breakthrough in the intermittent trade conflict between the world’s two largest economies.

Ben Bennett, Head of Investment Strategy for Asia at L&G Asset Management, said: “Expectations are running high for the Trump–Xi meeting, with the potential upside being a significant easing of tensions after direct talks.”

He added that markets have become accustomed to a pattern of fiery rhetoric followed by major deals, expressing optimism that this meeting could follow that trend. Bennett noted that the tensions with Canada may be part of a broader negotiation strategy.

US inflation data in focus

Investors are awaiting the release of September’s Consumer Price Index later on Friday, despite the ongoing government shutdown, now entering its third week.

Economists polled by Reuters expect the headline CPI to rise 0.4% month-on-month, while the core index — excluding food and energy — is projected to increase 0.3%.

Although analysts do not expect the data to change the Fed’s course toward a 25-basis-point rate cut next week, the figures may provide clues for the December policy meeting.

Markets are fully pricing in next week’s rate cut, alongside expectations for another reduction in December.

Dominic Banning, Head of G10 FX Strategy at Nomura, said: “This data release carries extra weight because markets haven’t had fresh official numbers for a while, so investors will pay more attention than usual.”

Currency movements

The euro was steady at $1.1614, on track for a 0.3% weekly decline, despite stronger-than-expected business activity in the eurozone in October, driven by the services sector, according to a survey released Friday.

The British pound slipped 0.1% to $1.3311, despite stronger-than-expected retail sales data, supported in part by increased demand for gold at online jewelry retailers.

The US Dollar Index, which measures the currency against six major peers, rose 0.5% for the week, last trading near 98.99 — up less than 0.1% on the day.

Markets digest new sanctions

Fresh US sanctions on Russian oil giants Rosneft and Lukoil sent oil prices sharply higher, following similar measures imposed by the UK last week in response to the ongoing war in Ukraine.

The oil rally weighed on energy-importing currencies, particularly the Japanese yen, which has also been pressured by the expansionary fiscal and monetary stance of new Prime Minister Sanae Takaichi.

The yen weakened to a two-week low of 152.85 per dollar after data showed Japan’s core consumer prices remained above the Bank of Japan’s 2% target, maintaining expectations for a possible rate hike in the coming months.

Reuters reported that Takaichi is preparing an economic stimulus package exceeding $92 billion to help households cope with inflation, a move that could limit the BOJ’s ability to raise rates next week. Futures markets currently assign only a 19% probability of a rate increase.

Banning of Nomura noted: “We face the risk of combining loose fiscal policy with relatively accommodative monetary policy, which could weigh on the yen in the long run.”

He added: “At this point, it’s difficult to build a strong case for a significant positive turnaround in the yen’s outlook.”