Palladium gains ground on track for largest weekly profit in year

Palladium prices rose on Friday as the dollar declined against a basket of major rivals on track for the best weekly performance in a year.

Investors are betting the Federal Reserve has reached the end of the policy tightening cycle, in turn pressuring dollar and US treasury yields. 

Now traders expect the Fed to cut interest rates by next May as inflation continues to slow down. 

Recent data indicated US consumer prices stabilized in October m/m, while core prices rose just 0.2%, while producer prices slowed down to 3-1/5 year nadir. 

A potential cut in interest rates will underpin non-yielding assets such as gold and industrial metals. 

Dollar on the other hand is heading for a weekly loss, making palladium and other metals cheaper to holders of other currencies. 

The dollar index fell 0.3% as of 15:45 GMT to 104.01, with a session-high at 104.5, and a low at 103.9.

Gold spot futures rose 1.2% to $1,062.5 an ounce as of 15:46 GMT. 

Palladium is heavily used in the automotive industry, to reduce exhaust fumes.