Palladium drops over 3% on weak demand concerns

Palladium prices fell during Monday’s trading despite a weaker US dollar against most major currencies, as renewed concerns over demand kept the industrial metal under pressure.

This comes amid the continued release of weak economic data from China. August figures showed that industrial production, retail sales, and fixed-asset investment all grew below expectations. The unemployment rate also rose unexpectedly to 5.3%.

These numbers followed last week’s soft inflation data, which confirmed persistent disinflationary pressures in the world’s second-largest economy, fueling further concerns about Chinese demand.

Separately, the ongoing Russia-Ukraine war continues to cast a shadow over markets, particularly metals, given that Moscow is one of the world’s largest palladium producers.

US President Donald Trump admitted on Monday that halting the Russia-Ukraine war is difficult under current conditions, noting that he was disappointed in President Vladimir Putin.

Dollar

The US Dollar Index fell 0.2% to 97.4 points by 16:03 GMT, after hitting a high of 97.7 and a low of 97.3.

Meanwhile, crypto markets are also awaiting the Federal Reserve’s decision this week, with markets pricing in a 99.6% probability of a 25 basis point rate cut, versus just 0.4% odds of keeping rates unchanged, according to CME FedWatch data.

Still, traders remain cautious about the long-term outlook for monetary easing, especially as the Fed has repeatedly warned about persistent inflation risks. Chair Jerome Powell has yet to commit to a clear path toward easing, despite mounting pressure from the White House to cut rates.

Palladium futures for December delivery dropped 3.2% to $1,210.5 an ounce by 16:04 GMT.