Palladium prices declined during Monday’s trading, pressured by a stronger US dollar against most major currencies and broad profit-taking across metal markets following the strong gains recorded recently.

In a note to clients last month, UBS raised its palladium price forecast by $300 per ounce to $1,800, citing a sharp increase in investment flows into the metal.

Analyst Giovanni Staunovo said the revision was “driven by the strength of investment demand in recent months,” noting that the relatively small size of the palladium market “often leads to sharp price swings.”

The bank explained that the recent price momentum has not been driven by traditional industrial use, but rather by investor positioning ahead of expected US interest rate cuts, a weaker dollar, and rising geopolitical uncertainty.

Staunovo added that “if investment demand remains strong, prices could move higher,” but warned that “in the absence of investment demand, we see the market as largely balanced,” which explains UBS’s preference for gold exposure instead.

Palladium demand has shifted in recent years after its use in automotive catalytic converters peaked in 2019 — the same year prices surged above platinum — prompting substitution toward other metals.

The growing adoption of electric vehicles, which do not use catalytic converters, has also weighed on palladium demand.

However, the bank noted that palladium has risen alongside platinum and silver since mid-2025. With palladium now “significantly cheaper than platinum,” UBS expects catalytic converter manufacturers to “switch back to using it… in due course.”

Investment activity in palladium has picked up notably, with UBS pointing to rising ETF holdings since mid-2025, along with a significant increase in speculative futures positions after being net short for most of last year.

China may also be supporting demand, as Staunovo said that the launch of yuan-denominated platinum futures contracts in Guangzhou “likely supported palladium demand” as part of broader trading activity across the platinum group metals complex.

Meanwhile, the US Dollar Index rose by 0.6% to 97.5 points by 16:19 GMT, after hitting a high of 97.6 and a low of 97.01.

In trading, March palladium futures were down 0.3% at $1,698 per ounce as of 16:19 GMT.

Bitcoin fell on Monday to trade near its lowest levels since April, after a sharp weekend selloff pushed prices toward the $75,000 area, amid broad leveraged liquidations and rising macroeconomic uncertainty.

The world’s largest cryptocurrency dropped 2.2% to $76,825.4 by 03:06 a.m. US Eastern Time (08:06 GMT), after touching $74,635.5 — a level not seen for about ten months. Bitcoin remains close to the 15-month low near the $70,000 mark as selling pressure persists.

Liquidations weigh heavily on the crypto market

The latest decline dealt a heavy blow to the broader digital asset market, with roughly $111 billion wiped from total cryptocurrency market capitalization over the past 24 hours, according to CoinGecko data, reflecting the scale of the selloff.

CoinGlass data showed that about $1.6 billion in leveraged positions were liquidated, as falling prices forced traders to rapidly unwind bullish bets. Thin liquidity — especially during weekend sessions — amplified losses, as key technical breaks triggered stop-loss orders and margin calls, accelerating the drop and increasing volatility.

Bitcoin’s weakness also comes alongside broader risk-off sentiment in global markets, as investor focus returns to the path of US monetary policy.

Warsh nomination to lead the Fed pressures crypto assets

Pressure on high-risk assets increased after US President Donald Trump nominated Kevin Warsh to chair the Federal Reserve, prompting investors to reassess interest rate expectations and liquidity conditions.

Warsh, a former Fed governor, is widely viewed as more hawkish, particularly regarding inflation control and balance sheet discipline. This stance points to tighter financial conditions than previously expected, reducing investor appetite for speculative assets — especially cryptocurrencies, which typically benefit from abundant liquidity and lower borrowing costs.

David Scott, market analyst at StoneX, said that Warsh’s earlier criticism of quantitative easing and the Fed’s balance sheet policies “triggered a rapid unwinding of trades built around currency debasement fears, including Bitcoin and other digital assets.”

These losses come after Bitcoin pulled back sharply from record levels reached last year, giving up a large portion of gains that had been driven by optimism over institutional adoption and easier financial conditions.

Altcoins continue to decline

Most alternative cryptocurrencies extended their losses, deepening the weekend downturn. Ethereum, the second-largest cryptocurrency, fell 6.6% to $2,290.92, trading near a seven-month low. XRP, the third-largest digital currency, dropped 4.4% to $1.59.

Oil prices fell by about 5% in early Monday trading, retreating from five-month highs recorded at the end of last week, after the latest tensions between the United States and Iran appeared to be easing.

By 7:09 a.m. US Eastern Time, global benchmark Brent crude was trading near $65 per barrel, down from around $70 reached last week, when US President Donald Trump warned Iran that a “massive naval fleet” was heading toward the Arabian Gulf.

Brent crude prices dropped 4.83% on Monday morning to $65.99 per barrel, while US West Texas Intermediate crude fell 5.11% to $61.92 per barrel.

Markets had reacted strongly last week to escalating tensions in the world’s most important oil-producing and exporting region, pushing prices sharply higher. However, the tone of statements shifted over the weekend, as President Trump said he believes Iran is “talking seriously” with the United States and expressed hope that negotiations could lead to an “acceptable” agreement.

Trump told a reporter aboard Air Force One that he could not confirm whether the military option was still on the table, saying, “I can’t confirm that,” but added that “we have very big, very powerful ships heading to that region,” before clarifying, “I hope they reach something acceptable through negotiation.”

The US president added, referring to Iran: “They have to do it, but I don’t know if they will. But they are talking to us… they are talking to us seriously.”

As the so-called geopolitical risk premium that had been priced into the market faded, oil prices pulled back on Monday from the five-month highs reached last Thursday.

ING commodities analysts Warren Patterson and Ewa Manthey said that “a broader correction across financial markets added further downward momentum to oil prices.”

Saxo Bank analysis said that “a military escalation that could drive gasoline prices sharply higher appears unlikely at this stage, especially with the president facing weaker polling and midterm elections approaching in November, where cost-of-living issues and his term in office will be central voter concerns.”

The US dollar held onto its gains on Monday as investors assessed the likely shape of monetary policy if Kevin Warsh takes over as Federal Reserve Chair, while the sharp drop in precious metals and oil prices weighed heavily on commodity-linked currencies.

The decline in commodities also spilled over into equity markets in Asia and Europe at the start of a tense week that includes several central bank meetings, key economic data releases, and upcoming elections in Japan.

The Japanese yen returned to the spotlight after Prime Minister Sanae Takaichi said over the weekend that a weak yen has benefits, in campaign remarks that appeared at odds with the Finance Ministry’s ongoing efforts to limit currency weakness.

The dollar steadied in European trading after rising on Friday following President Donald Trump’s announcement naming Warsh as his nominee to lead the Federal Reserve. Analysts assume Warsh would be less inclined to push for rapid and aggressive rate cuts than some other candidates, although he has appeared somewhat more dovish than current Chair Jerome Powell.

The dollar index, which measures the US currency against a basket of major peers, stood at 97.21, little changed after a 1% gain on Friday.

Mohammad Al-Sarraf, FX and fixed income analyst at Danske Bank, said: “Kevin Warsh, at least on the surface, is the most dollar-supportive choice Trump could have made. It’s too early to say the political risk premium in the dollar has disappeared, but some short-term risks have eased.”

Market pricing still points to two US rate cuts this year, with the first not expected before June, the month Warsh could take office if confirmed by the Senate. The euro pulled back from the $1.20 level to trade at $1.1852, while sterling was broadly steady near $1.3690.

Both the European Central Bank and the Bank of England are expected to leave interest rates unchanged when they announce their decisions on Thursday.

Commodity currencies under pressure

Currencies of economies closely tied to commodity prices and risk appetite came under pressure on Monday. The Australian dollar fell by as much as 0.7% to $0.6908 ahead of the Reserve Bank of Australia’s rate decision on Tuesday, despite expectations of a hike, before trimming losses to trade down 0.3% at $0.6944.

The New Zealand dollar also slipped to $0.5991, while the Canadian dollar weakened by about 0.2%. Against the Norwegian krone, the dollar rose as much as 0.7%, as Brent and West Texas Intermediate crude futures dropped about 5% each amid signs of a possible easing in tensions between the United States and Iran.

Yen continues to weaken

The Japanese yen eased slightly to 154.90 per dollar, partly affected by Takaichi’s comments seen as tolerant of currency weakness, as well as expectations that her party could secure a strong victory in the upcoming lower house elections. An Asahi newspaper poll showed the ruling Liberal Democratic Party could comfortably surpass the 233-seat majority threshold in the 465-seat chamber.

Analysts at Société Générale said this scenario, although “overly optimistic,” would be “highly significant” for Takaichi if realized. They added it would “allow her to move ahead freely with expansionary policies,” with markets likely to respond first by pricing a higher risk premium on long-term Japanese government bonds and on the yen.

Investors had already been selling the yen and Japanese government bonds ahead of the election, expecting more expansionary fiscal policy if Takaichi wins a strong mandate, while the tax cuts promoted by her party could add further strain to already stretched public finances.

Even so, the weaker yen has recently found some support, as traders remain alert to the possibility of coordinated currency market intervention by the United States and Japan, after talk of exchange-rate checks by both sides late last month triggered a sharp jump in the yen.