Palladium receives support and approaches $1,600 on strong demand prospects

Palladium prices rose on Tuesday amid prospects for strong demand on industrial metals even as the dollar muscles up against major rivals.

Chinese Demand

Analysts expect China's economy to grow stronger as Beijing give up zero-tolerance policies with Covid 19. 

China is the world's largest consumer of industrial metals, with prices highly sensitive to Chinese data. 

US Inflation

Now investors await major US data in April to gauge the path ahead for monetary policies, after recent data showed consumer inflation expectations were mixed in April.

The Federal Reserve announced a 0.25% rate hike to 5.25% last week as expected by market analysts, the highest level since 2007.

However the bank directly hinted at the end of the current cycle of policy tightening.

The Fed raised interest rates 7 times in 2022, during March, May, June, July, September, November, and December.

Fed Chair Jerome Powell asserted the bank will continue to fight inflation to bring it down to the 2% targets, while continuing to monitor economic data to gauge progress.

Dollar 

The dollar index rose 0.3% as of 15:03 GMT to 101.6, with a session-high at 101.8, and a low at 101.3. 

Dollar's strength usually weighs on metals and commodities but palladium bucked the trend and threaded higher. 

Palladium is heavily used in the automotive industry to reduce emissions among other major industries. 

Palladium futures due in June rose 0.7% to $1,575 an ounce as of 15:05 GMT.