Palladium prices rose during Wednesday’s trading, supported by technical buying across several precious metals, most notably silver, which reached record highs, amid ongoing uncertainty surrounding US Federal Reserve policy.

Daily movements in palladium prices are influenced by the same factors that drive the broader precious metals complex, primarily US interest rate expectations, the strength of the dollar, and overall risk appetite among investors.

Reuters reported that investors remained cautious ahead of key US employment data, as well as upcoming inflation figures, prompting profit-taking across metals markets following a strong rally throughout 2025. In this context, palladium posted modest gains, while platinum remained relatively stable.

These developments are particularly significant given that palladium, like gold and silver, is globally priced. Expectations of lower interest rates or a weaker dollar tend to support non-yielding assets, while heightened sensitivity to economic data often leads to short-term risk reduction in metals markets.

Reuters also noted that delays and gaps in US economic data collection, caused by the government shutdown, have further complicated the macroeconomic outlook, adding an additional layer of uncertainty for traders positioning their portfolios.

European policy reassessment of internal combustion engines has emerged as a key medium-term demand driver for palladium.

On December 16, signals emerged that the European Commission may soften its stance on banning new internal combustion engine vehicles by 2035. According to Reuters, the Commission is preparing to revise the current plan by allowing the continued sale of certain non-fully electric vehicles, under pressure from major member states and the automotive industry.

Under proposals cited by the agency, the emissions reduction target could be adjusted from 100% to 90% by 2035 compared with 2021 levels, potentially extending the lifespan of plug-in hybrids and range-extender vehicles.

In a separate report, Reuters said the European Commission is also considering compensation mechanisms that would permit continued sales of combustion-engine vehicles beyond 2035 through the use of alternative fuels or green steel accounting.

This policy shift is highly relevant for palladium price expectations, given its close link to internal combustion engines, where it is used in catalytic converters to reduce harmful emissions in gasoline vehicles. Any extension in the lifecycle of combustion and hybrid vehicles in Europe could slow the erosion of palladium’s core demand base.

Reuters quoted a commodities strategist at WisdomTree as saying that such a policy shift would likely support internal combustion vehicles, which rely on palladium and platinum.

On the supply side, palladium market balance remains in focus, particularly following updated guidance from Russia’s Norilsk Nickel, the world’s largest palladium producer.

According to recent estimates, the company expects the palladium market to be broadly balanced in 2025 when excluding investment demand, but to show a deficit of around 200,000 ounces when investment demand is included. For 2026, Norilsk expects a deficit of approximately 100,000 ounces even without investment demand.

These distinctions are critical, as palladium is a relatively small and concentrated market, meaning shifts in investment flows or ETF demand can materially alter supply-demand dynamics and price sentiment.

In this context, a report from the Indian Bullion and Jewellers Association noted that palladium has risen by around 25% since the start of the latest rally, alongside strong gains in silver and platinum, illustrating how momentum has spread across the precious metals complex.

On pricing, market data showed NYMEX palladium futures for December 2025 trading near $1,592.8 per ounce, with notable intraday gains. Spot and futures prices can diverge depending on liquidity, short-term supply availability, and financing conditions.

Looking ahead, palladium’s strong performance in 2025 has prompted analysts to reassess their outlook for 2026, with the market caught between two competing narratives: structural support from constrained supply and policy developments that could extend demand for combustion engines, versus long-term headwinds from the expansion of fully electric vehicles and substitution risks.

Consensus projections point to a wide price range in 2026, with average estimates clustering around $1,250–$1,300 per ounce, reflecting elevated uncertainty following this year’s sharp rally.

During US trading hours, March-delivery palladium futures rose by 3.5% to $1,714.5 per ounce as of 16:52 GMT.

Bitcoin posted a modest gain on Wednesday, trading above the $88,000 level after limited losses earlier in the week. However, gains remained capped amid continued outflows from US-listed exchange-traded funds (ETFs), alongside ongoing uncertainty over the Federal Reserve’s interest rate path, keeping investors cautious.

The world’s largest cryptocurrency rose 1.3% to $88,497 by 09:53 ET (14:53 GMT).

Bitcoin continued to move within a narrow range, struggling to regain momentum as weak risk appetite and a lack of fresh catalysts weighed on prices, even as broader financial markets remained relatively stable.

Bitcoin steadies amid ETF outflows and Fed caution

Pressure on Bitcoin intensified as outflows from US spot Bitcoin ETFs persisted. Data showed that these funds recorded net redemptions over recent sessions, extending a withdrawal trend that has raised concerns about waning institutional demand.

ETF outflows have removed one of the key sources of support that previously helped fuel Bitcoin’s rally earlier this year.

Cryptocurrency markets also took cues from US economic data, as investors reassessed monetary policy expectations following mixed signals from the labor market.

The latest US jobs data pointed to slower employment growth alongside a gradual rise in the unemployment rate, suggesting the labor market may be entering a cooling phase. However, the slowdown has not been pronounced enough to give the Federal Reserve a clear signal to accelerate interest rate cuts.

These developments have complicated expectations for the Fed’s next moves, as policymakers continue to balance signs of softening labor conditions against inflation that remains above target.

As a result, uncertainty has increased across markets regarding the timing and pace of any future rate cuts, a factor that has weighed on risk-sensitive assets, including cryptocurrencies.

Attention is now turning to US inflation data due for release on Thursday.

Cryptocurrency prices today: Limited moves among altcoins

Most major altcoins showed limited movement on Wednesday, reflecting the cautious market backdrop. Media reports also pointed to weak liquidity behind the subdued price action.

Ethereum, the world’s second-largest cryptocurrency, fell 1.2% to $2,957.16.

Meanwhile, XRP, the third-largest cryptocurrency globally, rose 1% to $1.94.

Oil prices rose by more than 2% on Wednesday after US President Donald Trump ordered a full blockade on all sanctioned oil tankers entering or leaving Venezuela, escalating geopolitical tensions at a time when concerns over global demand are mounting.

Brent crude futures climbed $1.41, or 2.4%, to $60.33 per barrel by 10:18 GMT, while US West Texas Intermediate crude futures rose $1.42, or 2.6%, to $56.69 per barrel.

Oil prices had settled in the previous session near five-year lows, amid progress in peace talks between Russia and Ukraine, as any potential agreement could lead to an easing of Western sanctions on Moscow, releasing additional supplies into a market already grappling with fragile global demand.

On Tuesday, Trump issued an order imposing a blockade on all sanctioned oil tankers entering and leaving Venezuela, adding that he now considers the country’s leadership a foreign terrorist organization.

Warren Patterson, oil analyst at ING, said: “The risks related to Russia are well known and largely priced in, but there are clear risks surrounding Venezuelan oil supply.”

Trump’s remarks came one week after the United States seized a sanctioned oil tanker off the coast of Venezuela.

It remains unclear how many vessels will be affected by the decision, how the United States will enforce the blockade on sanctioned ships, or whether Trump will deploy the US Coast Guard to intercept vessels, as was done last week. In recent months, the United States has deployed naval vessels in the region.

While many ships carrying Venezuelan oil are subject to sanctions, other vessels transporting the country’s crude, as well as oil from Iran and Russia, are not sanctioned. Tankers chartered by Chevron continue to ship Venezuelan crude to the United States under a license previously granted by Washington.

Muyu Xu, senior oil analyst at Kpler, said: “Venezuelan oil production accounts for about 1% of global output, but supplies are concentrated among a small group of buyers, mainly China’s independent refiners known as teapots, the United States, and Cuba.”

She added that China is the largest buyer of Venezuelan crude, accounting for around 4% of its total oil imports.

Prices also received additional support from a sharp decline in US oil inventories.

Data from the American Petroleum Institute, cited by market sources on Tuesday, showed that US crude stockpiles fell by 9.3 million barrels last week. If confirmed by the US Energy Information Administration data due later on Wednesday, the draw would be far larger than the 1.1 million-barrel decline expected by analysts polled by Reuters.

The US dollar held steady on Wednesday near its lowest levels since early October, after data showed the labor market remains weak, keeping investors cautious about the timing of the Federal Reserve’s next interest-rate cut.

The euro traded at $1.1751 in Asian hours, hovering near a 12-week high reached in the previous session, ahead of the European Central Bank’s policy decision on Thursday, where the bank is expected to keep interest rates unchanged.

The dollar index, which tracks the US currency against six major peers, stood at 98.193, remaining close to its lowest level since October 3, recorded on Tuesday. The index is down 9.5% so far this year and is on track for its biggest annual decline since 2017.

Although the US economy added 64,000 jobs in November, beating economists’ expectations in a Reuters poll, the unemployment rate rose to 4.6% last month. The data were distorted by the effects of a 43-day government shutdown.

Still, investors and analysts were unconvinced that the jobs report materially altered the outlook for monetary policy, as markets now await inflation data due on Thursday.

Tony Sycamore, market analyst at IG, said: “Taken together, the data paint a picture of very weak jobs growth. While it’s not weak enough to put a January rate cut back on the table, the continued rise in unemployment keeps the door open to a potential cut at the March FOMC meeting, if upcoming employment reports show further deterioration.”

The Federal Reserve cut interest rates as expected last week but signaled that borrowing costs are unlikely to fall again in the near term, projecting only one rate cut in 2026. Markets, however, are currently pricing in two cuts next year, even as futures pricing suggests a January cut remains unlikely.

Thomas Matthews, head of Asia-Pacific markets at Capital Economics, said: “If CPI data come in as expected later this week, the Fed won’t feel any pressure to ease policy in the next few meetings. Even March may be a little too early to expect a rate cut.”

Central Bank Meetings in Focus

Central banks are set to close out the year with a series of key policy decisions in the coming days. Alongside the ECB, the Bank of England is expected to cut interest rates on Thursday in a close vote, while the Bank of Japan is widely expected to raise rates on Friday to their highest level in three decades.

The British pound was steady at $1.3424, slightly below a two-month high hit on Tuesday, after data showed UK unemployment rose to its highest level since early 2021, while private-sector wage growth slowed to its weakest pace in nearly five years. The figures, released ahead of Chancellor Rachel Reeves’ annual budget last month, reinforced expectations of a rate cut.

Meanwhile, the Japanese yen edged slightly higher to 154.56 per dollar, nearing a two-week high ahead of the Bank of Japan’s meeting. With a rate hike widely expected, markets will focus on forward guidance and the policy path for next year.

Thierry Wizman, global foreign exchange and rates strategist at Macquarie, said the Bank of Japan’s move reflects inflationary pressures linked to a weaker yen, as well as renewed political willingness to address what he described as Japan’s “cost-of-living crisis.”

He added: “We are more constructive on the Japanese yen than on the British pound, and we expect USD/JPY to move toward 146 by the end of 2026. We also see GBP/USD remaining close to the 1.33–1.34 range throughout 2026.”