Palladium slides by over 3% to below $900

Palladium prices fell on Friday as  the dollar edged down against most major rivals, while investors assess the likely path ahead for US policies. 

A series of stimulus measures launched by China last year to boost the real estate market failed to buoy the market sufficiently. 

A major reason is Chinese Banks’ doubts and refusal to lend new credit to the struggling sector.

On the other hand, consumer prices in China continued their slowdown in January for the fourth straight month, hinting at deflation. 

Official data showed consumer prices fell 0.8% in January  y/y after a 0.3% drop in December.

However, consumer prices did rise 0.3% m/m after a 0.1% increase in the previous month. 

Producer prices fell 2.5% y/y in January, after a 2.7% tumble in December. 

China’s economy grew by 5.2% in 2023, passing the official target of 5%, however the recovery seems shaky in the eyes of many investors. . 

On another front, Fed Chair Jerome Powell said in a Sunday interview that he expects only three Fed rate cuts this year, and he doesn’t expect a cut in March. 

Minneapolis Fed Chair Neil Kashkari warned today from cutting rates too quickly, as current tight conditions haven’t yet impacted all aspects of the US economy sufficiently. 

Investors expected six Fed rate cuts this year, and such optimistic forecasts sent US stocks sharply higher.

Otherwise, the dollar index stabilized at 104.1 as of 16:48 GMT, with a session-high at 104.2, and a low at 103.9. 

Palladium March futures fell 3.1% as of 16:50 GMT to $864.5 an ounce.