Palladium prices declined on Tuesday as the dollar  rose against major rivals. 

The decline comes as dollar strengthens to 20-year highs at 103.8, with a 0.1% gain so far.

A stronger dollar hurts palladium and other currencies and makes them costlier to holders of other currencies. 

The Fed announced last week a hike of 50 basis points in interest rates to below 1%, the largest such hike since 2002,

Investors are concerned such policies are leading the world to global recession and lower demand on commodities. 

China

China remained under lockdown due to a new Covid 19 infectious wave, in turn hammering trade and industrial demand.

Palladium futures due in June fell 0.4% to $2,036 an ounce as of 14:34 GMT.

Oil prices declined in European trade for another session, hitting week lows amid concerns about a global economic recession.

Oil Prices

US crude fell 2.05% to $100.47 a barrel, while Brent shed 2% to $103.31 a barrel, after US crude lost 7.4% yesterday, while Brent shed 7.1%, the largest loss since late March.

Global recession

Concerns about a global recession and subsequent decline in oil demand are hurting oil prices.

Recent data showed Chinese exports rose by the slowest rate in two years amid a Covid 19 wave.

EU

EU sources said that a proposition to ban Russian oil supplies is likely to be refused by several countries such as Greece.

It's becoming clear that Europe's dependence on Russian gas and oil is hampering any plans for total bans on Russian supplies, in turn pressuring oil prices.

Australian dollar continues to decline even after the Reserve Bank of Australia hiked interest rates last week for the first time since 2010.

We explore the reasons for such an overwhelming decline against the US dollar.

Such reasons include The RBA itself and the future of Australian interest rates, and the Chinese economy's grim forecasts, and the hefty losses on Wall Street.

AUD/USD fell 0.6% to 0.6910, the lowest since July 2020, after losing 1.8% on Monday, the third loss in a row.

The RBA decided to hike rates by 25 basis points in May to 0.35%, surpassing estimates of a 15 basis points hike, the first since 2010.

Aussie reacted favorably for just a couple of days before a collapse, with the RBA expecting more hikes in the next few months to contain inflation.

However the decision to hike rates was quite late compared to market forecasts, which failed to prop up the Aussie sufficiently. 

China's Economy

China continues to face a difficult Covid 19 infection, with is forcing the lockup of several major cities, including Shanghai.

such a lockup is hammering economic performance naturally, and the Australian economy is highly dependent on China's trade activities. 

Wall Street

The Aussie is highly reactive to the US stock market, so it's only natural for it to sustain hefty losses alongside similar losses in all Street

US stock have hit 18-months lows on forecasts for several more Fed rate hikes, which will raise borrowing costs. 

Gold prices rose in European trade, recouping after hefty losses yesterday, as US yields slow down ahead of important statements by Fed officials. 

Gold Prices

Gold rose 0.6% to $1,865 an ounce, after tumbling 1.55% yesterday, as the dollar index hits 20-year highs. 

US Bonds 

US 10-year treasury yields fell 1.9% today away from four-year highs at 3.203% on active profit-taking, as bets on a massive June rate hike wane.

Fed officials have hinted that a 75 basis points hike in June is unlikely, with investors awaiting crucial inflation data tomorrow. 

Estimates 

Gold continues to face a bearish trend overall as the Fed is expected to tighten the policy and push US treasury yields higher throughout the year.

The SPDR

Gold holdings at the SPDR fell 6.1 tones yesterday to a total of 1,075 tones, the lowest since March 17.