Palladium prices fell on Friday as the dollar gained ground against most major rivals while markets assess latest statements by Fed Chair Jerome Powell.

At Jackson Hall, Jerome Powell said that cutting inflation requires more flexible labor markets, while bringing inflation back to 2% will require less growth than usual.

Lower US rents indicate inflation has fallen down in the US housing sector, and he noted the required and sustained work to control commodity inflation.

Powell said the Fed will continue to monitor prices closely, especially energy and food prices which are still high.

Powell asserted the Fed's commitment to tighten monetary policies to curb inflation, however he cautioned that too much policy tightening could be damaging to the economy.

Otherwise, the dollar index rose 0.2% as of 16:44 GMT to 104.2, with a session-high at 104.4, and a low at 103.7. 

Palladium futures due in December fell 1.1% to $1235.5 an ounce as of 16:45 GMT. 

Oil prices rose in European trade on Friday with US crude recovering for another session off four-week lows while Brent also climbed for the first session in five amid expectations Saudi Arabia will extend its voluntary production cuts for another month.

Now investors await Fed Chair Jerome Powell's speech later today at Jackson Hall to gather more clues on the likely path ahead for US monetary policies.

Global Oil Prices

US crude rose 1.7% to $80.16 a barrel, with a session-low at $78.83, while Brent added 1.65% to $84.06 a barrel.

US crude rose 0.4% on Thursday, the first profit in in four sessions away from a four-week trough at $77.64.

Brent fell 0.25% yesterday, the fourth loss in a row, plumbing July 24 lows at $81.65 a barrel on global demand concerns.

Saudi Production 

Many analysts expect Saudi Arabia to extend its voluntary production cuts by a million bpd for the third month in a row until the end of October.

Riyadh already extended its production cuts until the end of September, while Russia vowed to cut its crude exports by 300 thousand bpd next month.

Thus analysts believe the oil market is heading for a considerable deficit as the Saudi cuts will deepen market shortages to three million bpd in the third quarter of the year according to some estimations. 

US Stocks 

The Energy Information Administration reported a drop in US crude stocks by 6.1 million barrels last week to a total of 433.5 million barrels, while analysts only expected a drop of 2.9 million barrels.

Gasoline stocks rose 1.5 million barrels to 217.6 million barrels, while distillate stocks rose 900 thousand barrels to 116.7 million barrels.

US Production

The EIA also reported an increase of 100 thousand bpd in US crude production last week.

Thus total US production now increased to 12.8 million bpd, the highest since March 2020.

Dollar rose in European trade against a basket of major rivals on track for the second profit in a row, scaling a two-month high.

Strong US data and bullish Fed remarks bolstered the case for another US interest rate hike this year. 

Now investors await Fed Chair Jerome Powell's speech later today at Jackson Hall to gather more clues on the likely path ahead for US monetary policies.

The Index

The dollar index rose 0.3% to 104.31, the highest since June, with a session-low at 103.99, after closing up 0.6% yesterday, the second profit in three days following positive US labor data.

Earlier US data showed unemployment claims fell for the second week in a row in another sign of tight labor conditions in the US.

Austin Fed President Susan Collins said the Fed might raise interest rates once more, and might need to maintain tight policies for an extended duration.

Fed Rates

After the data and remarks, odds for a 0.25% Fed interest rate hike in September rose to 20%.

Odds for a 0.25% Fed rate hike in November rose as well to 49%.

Powell

As Fed Chair Jerome Powell speaks today in Jackson Hall, investors will look for his tones to measure the likely path ahead this year for monetary policies. 

Gold prices fell in European trade for the first session in five away from two-week highs on active profit-taking and under pressure from the stronger dollar.

The losses come ahead of Fed Chair Jerome Powell's speech at Jackson Hall later today, expected to include clues on the future of US interest rates. 

Prices Today

Gold prices fell 0.2% to $1,912 an ounce, with a session-high at $1,917, after rising 0.1% on Thursday, the fourth profit in a row, marking a two-week high at $1,923. 

Gold prices rallied this week as US treasury yields tapered off while haven demand on the precious metal improved amid concerns about global recession.

US Dollar

The dollar index rose 0.3% on Friday on track for the second profit in a row, marking a two-month high at 104.30 against a basket of major rivals. 

Such gains came after strong US data and bullish Fed remarks which bolstered the case for another US interest rate hike this year.

Strong Data

Earlier US data showed unemployment claims fell for the second week in a row in another sign of tight labor conditions in the US.

Fed Remarks

Austin Fed President Susan Collins said the Fed might raise interest rates once more, and might need to maintain tight policies for an extended duration.

After the data and remarks, odds for a 0.25% Fed interest rate hike in September rose to 20%. 

Odds for a 0.25% Fed rate hike in November rose as well to 49%. 

Powell

Now investors await Fed Chair Jerome Powell's speech later today at Jackson Hall to gather more clues on the likely path ahead for US monetary policies. 

The SPDR

Gold holdings at the SPDR Gold Trust fell 0.87 tonnes yesterday to a total of 884.04 tonnes, the lowest since January 2020.