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After its sharp Q3 2025 rally, palladium has been drifting lower and is now shaping a descending triangle. Prices are pressing against the horizontal support zone, and a decisive break below that level could confirm a bearish continuation.

Gold’s earlier breakout from an ascending triangle set the stage for its upward trend. Since then, prices have consolidated into a symmetrical triangle, reflecting short-term indecision. The recent move above the upper resistance suggests momentum is turning higher again and may mark the next leg of the broader uptrend.

The Gold-Palladium Ratio has trended higher for several years, reflecting gold’s persistent outperformance. It now sits near the upper resistance of a symmetrical triangle. A breakout to the upside would signal a further widening in the performance gap between the two metals.

Live cattle formed a clear double top before breaking decisively below key support. The subsequent limit-down move reinforces the downside pressure and points toward the potential for a broader correction.

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Following the unprecedented 43-day U.S. government shutdown that began on October 1, 2025, every major U.S. economic release has effectively become a volatility event for traders. Markets are trying to catch up on months of delayed information and missing policy guidance. With the Federal Reserve’s (Fed) final meeting of the year approaching, positioning has swung sharply between expectations of a single rate cut and the beginning of an early easing cycle. This uncertainty has been reflected in the rapid repricing of December rate cut odds on FedWatch. Just last week, the implied probability of a December cut hovered near 30 percent. More recent Federal Reserve commentary pushed those odds toward 80 percent. Currently, several banks have withdrawn their December cut forecasts due to stronger employment data. Precious metals, high growth equities and major cryptocurrencies have rallied substantially this year. However, since the third quarter of 2025, those gains have stalled or partially unwound, as markets continue to speculate on if, and when, the Fed will act.

Gold has been the focal point of global markets in 2025, driven by geopolitical tensions, trade uncertainty, strong central bank buying and shifting expectations for real interest rates. Its surge has lifted sentiment across the precious metals complex, drawing renewed interest in silver, platinum and palladium as traders reassess their relative value against gold. In the jewelry market, households continue to view these metals as stores of value and informal savings vehicles, reinforcing demand even as prices rise. Silver is often treated as a high beta expression of the gold trade. In China, platinum’s appeal as a cheaper substitute helps gold’s momentum extend to the broader market.

Beneath the surface, however, the key difference between gold and the rest of the precious metals complex lies in industrial demand. What gold lacks in industrial applications, it more than makes up for through systematic central bank accumulation and its unique status as a monetary asset. Official institutions do not build reserves of silver, platinum or palladium in the same way. This means that any attempt for gold to pull the rest of the metals higher ultimately depends on the evolving balance between jewelry demand and industrial applications in each market.

Palladium stands out the most. Its demand has historically been dominated by use in gasoline catalytic converters, with only a marginal role in jewelry. The structural shift toward electric vehicles has placed that core demand source under long-term pressure. As a result, palladium prices often diverge from gold, giving the pair one of the weakest correlations within the precious metals group. Unless unexpected supply disruptions or new regulations revive its industrial relevance, palladium risks lagging its peers. If the gold narrative continues to pivot away from crisis hedging and toward themes centered on real yields and central bank accumulation, while palladium remains tied to a challenged auto catalyst story, the Gold-Palladium Ratio may continue trending higher.

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We conclude with the following hypothetical trades:¹

Case study 1: Long Gold-Palladium Ratio Spread

If one holds a bullish view of the Gold-Palladium Ratio, one could consider buying one Gold (GC) futures at the current price of $4,200 and selling three Palladium (PA) futures at the current level of $1,435, with the ratio at 4,200 / 1,435 = 2.92. We would place the stop-loss below 2.60, a hypothetical maximum loss of 2.92 – 2.60 = 0.32 points. The Gold futures and Palladium futures contract have the same point value of 100 USD. Since the contract size of both contracts are 100 troy ounces, the sizing required to match the notional values would be the inverse of the ratio:

• Gold leg: 4,200 x 100 x 1 = 420,000
• Palladium leg: 1,435 x 100 x 3 = 430,500

We can look at two hypothetical scenarios to understand the approximate dollar amount of a 0.1 point move in the ratio.

Scenario 1: Assuming Gold stays unchanged, and Palladium falls to 1,390, the ratio becomes 4,200 / 1,390 = 3.02. The overall profit, which comes from the Palladium position in this case, is (1,435 – 1,390) x 100 x 3 = 13,500 USD.

Scenario 2: Assuming Palladium stays unchanged, and Gold falls to 4,047, the ratio becomes 4,047 / 1,435 = 2.82. The overall loss, which comes from the Gold position in this case, is (4,047 – 4,200) x 100 x 1 = 15,300 USD.

In Scenario 1, the ratio drops by 0.1 points, yielding a profit of 13,500 USD from the short palladium position. In Scenario 2, the ratio rises by 0.1 points, yielding a loss of 15,300 USD from the long Gold position. This ratio spread can be traded using Micro Gold (MGC) futures contract and Micro Palladium (PAM) futures contract at 1/10 the contract size and point value.

Case study 2: Short Live Cattle futures

If one holds a bearish view of live cattle, one could consider taking a short position in Live Cattle (LE) futures at the current price of $206.750, with a stop-loss above 210, a hypothetical maximum loss of 210 – 206.750 = 3.25 points. Looking at Figure 4, Live Cattle futures has the potential to trace back to its previous key range of 190, resulting in 206.750 - 190 = 16.75 points. Each Live Cattle futures contract represents 40,000 pounds; each point move is 400 USD.

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¹ Examples cited above are for illustration only and shall not be construed as investment recommendations or advice. They serve as an integral part of a case study to demonstrate fundamental concepts in risk management under given market scenarios. Please refer to full disclaimers at the end of the commentary.

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