Palladium prices fell on Friday as the dollar rose against most major rivals, with the industrial metal relinquishing the $1000 barrier once more.

Recent US data showed personal spending, the Fed’s favorite inflation index, stabilized at a 2.8% growth rate in March, but remained above analysts’ expectations of 2.7%. 

Core personal spending, excluding food and energy, rose 2.7%, up from 2.5%. 

Personal income rose 0.5% last month, above 0.3% in February. 

Palladium was recently boosted by concerns about supply shortages from Russia as the US and the EU tighten their sanctions on Russian metal exports to weaken its war capabilities in Ukraine. 

Palladium

Palladium is used heavily in the automotive sector, and especially in diesel cars to reduce exhaust fumes.

However, as EV car adoption spreads, demand on internal combustion cars and palladium in turn will decline accordingly. 

Palladium’s Historical Pricing 

Across the previous decade, palladium’s instant prices wavered between $500 and $1500, beforere surging to a record high at $3440 in March 2022 following the onset of the Russian invasion of Ukraine, which disrupted supplies. 

However palladium now has lost over two thirds of its valuation due to steep increase in EV adoption rates. 

Otherwise, the dollar index rose 0.5% to 106.1 as of 16:22 GMT, with a session-high at 106.1, and a low at 105.4. 

On trading, palladium futures due in June tumbled 2.2% to $960.5 an ounce as of 16:22 GMT. 

Oil prices rose in European trade on Friday, extending gains for the second straight session, with US crude scaling a one-week high, on track for weekly gains following a surprise US inventory drawdown. 

Markets are now focusing on oil market fundamentals once more as the tension between Iran and Israel fades, while hopes climb for improving US demand .

Prices 

US crude rose 0.8% to $84.42 a barrel, the highest in a week, with a session-low at $83.61. 

Brent rose 0.7% to $87.96 a barrel, with a session-low at $87.79. 

On Thursday, US crude rallied 1.2%, while Brent added 0.1% as the US dollar declined against major rivals. 

Weekly Trades

Oil prices are up 2.25% on average this week, on track for the first weekly profit in three weeks.

US Stocks 

The Energy Information Administration reported a drop of 6.4 million barrels in US crude stocks last week to 453.6 million barrels, while analysts expected a drop of 2.1 million barrels.

Gasoline stocks fell 0.6 million barrels to 226.7 million barrels, as distillate stocks rose by 1.6 million barrels to 116.6 million barrels. 

US Production

The EIA also reported no change in US production last week at 13.1 million bpd. 

Iran-Israel Tensions Fade  

The Iranian government has strongly signaled that it doesn’t plan to react to Israel’s recent attack on Iranian soil on Friday.

Iran’s foreign minister said in earlier remarks that as long as Israel doesn’t attack Iranian interests once more, Iran won’t react. 

Global Demand 

Many analysts now expect interest rates to fall in the UK and EU in June, which would underpin growth and fuel demand. 

Capital Economics’ analysts said in a memo that the services sectors in the eurozone and the UK have expanded this month by the fastest pace in a year, indicating brisk momentum. 

Sterling rose in European trade on Friday against a basket of major rivals, extending gains for the fourth straight session against the yen, and scaling a 16-year peak and trading above the psychological barrier of 200 yen for the first time since 2008. 

The UK-Japan interest rate gap is expected to hold for an extended duration in favor of the UK, in turn boosting the pound.

The Price 

GBP/USD rose 0.7% to 196.09 yen, the highest since 2008, with a session-low at 194.33. 

The pound rallied 0.6% against yen yesterday, the third profit in a row, amid renewed concerns about the UK-Japan interest rate gap.

Selloff

The yen continues to face massive selloff pressures against major rivals amid doubts about whether the Japanese authorities will actually intervene to support the yen.

The yen also lost ground after a bearish Bank of Japan policy meeting, which hurt the odds of a new Japanese interest rate hike this year. 

Interest Rate Gap

The current Japan-UK interest rate gap stands at 515 basis points in favor of the UK, and such a gap will continue to underpin the pound especially as the odds of early UK interest rate cuts this year diminish. 

BOJ Rates

The Bank of Japan raised interest rates in March for the first time in 17 years out of negative territory, however it almost ruled out another rate hike this year. 

Nvidia has witnessed one of the most stunning success stories in recent years.. But before we get into the details, let’s have a quick history lesson.

Nvidia was founded in 1993, and gained quick fame by producing GPUs for video games, which helped particularly with 3D display.

However, with recent sudden improvement in AI technology, the company’s GPUs found incredible applications, with fourth quarter earnings in 2023 surging by 265%. 

Just a decade ago, the company was valued at $10 billion, before surging to $50 billion in 2016, and as of 2024, it reached a valuation of $2 trillion, becoming the third largest publicly traded company in the world. 

In many cases, some people tend to put financial markets and especially the tech sector into a separate metal bucket away from the usual investments into value stores, such as gold and silver.

However in many cases, such precious metals are highly connected to tech. 

Gold for example is a major component in Nvidia products, alongside tin, tungsten, and others. 

Gold has proven once again its excellent industrial applications, especially with conduction and its chemical properties, which have proven useful in chips and internal computers keys and wires, despite the high cost. 

And as competition surges for AI-related GPUs, their prices are expected to surge and the direct link with gold prices will decline, which means companies will be able to utilize gold in GPUs with a freer hand. 

That’s why some inventive investors are betting on the combination of gold and AI, and it has to be rather ironic that one of the oldest and most traditional value storage items such as gold is now directly linked with the most cutting edge industry.