“It just is evidence of the volatility in the market and how much uncertainty is priced into the market at the moment,” Simona Gambarini, commodities economist at Capital Economics, told the Wall Street Journal.

How Sanctions Would Affect Russia Supply

Any sanctions or disruptions to Russian supply would help bolster the commodity’s prices, especially in a tight market where consumption has outstripped production by 110.6 metric tons in 2017. Looking ahead, refiner Johnson Matthey projects the market will continue to remain in a large deficit this year.

“This is very much driven by the uncertainty of Norilsk Nickel supply in the world,” Suki Cooper, a precious metals analyst at Standard Chartered Bank, told Mining Weekly. “There’s not an acute shortage in palladium at the moment, but there are real concerns that we might face that.”

Palladium enjoys increased industrial demand as the global economy improves. Around 80% of palladium demand comes from use in catalytic converters in automobiles.

For more information on the palladium markets, visit our palladium category.