FX.co ★ Palladium Drops Below $1,400 on Middle East Uncertainty

Palladium futures fell below $1,400 per ounce, extending losses amid a broad-based metals sell-off triggered by rising tensions in the Middle East. President Donald Trump’s prime-time address, which offered no clear path to resolving the conflict while signaling an escalation in military operations — including potential strikes on electrical infrastructure in the coming weeks — further rattled markets. A stronger US dollar and higher bond yields weighed on non-yielding assets, while persistent inflation reinforced expectations of tighter monetary policy. Palladium also came under pressure from profit-taking after its rally from late 2025 into early 2026, which had pushed prices to their highest levels since 2022. Softening demand from the automotive sector and expanding supply, supported by increased recycling and steady primary production, added to the decline. At the same time, the accelerating transition to battery-electric vehicles (EVs), which do not require palladium, is steadily eroding demand and driving the market into surplus.