Hedge Funds Are Pressing Their Palladium Short
Key takeaways
- Palladium futures fell about 22% between the CFTC reports of 25 August and 13 October 2026, to about $1,113 an ounce, and about 45% from their January high.
- In five weeks, Managed Money (hedge funds and CTAs) grew its NYMEX palladium shorts from 9,106 to 16,098 contracts, up 77%. The net short is now 10,860, the biggest since May 2025.
- The number of funds short rose from 32 to 46. These are fresh bets on lower prices, not old positions.
- Fund shorts now equal 67% of all palladium open interest, a share topped in only about 4% of weekly reports since 2006.
- Palladium's z-score of -2.78 is the most extreme reading among the major metals. COTInsight classes it as Extreme Short.
The Short Answer
Palladium is falling, and hedge funds are leaning into the fall. While gold's recent drop came from funds closing longs, palladium's is the opposite: new shorts are piling in. The weekly COT report shows the short side of NYMEX palladium growing every week since early September.
This note puts numbers on it, using the CFTC Commitments of Traders report for NYMEX palladium, futures and options combined, through the report dated Tuesday 13 October 2026.
What the Palladium COT Report Shows This Week
Managed money positions in NYMEX palladium:
| Report date | Funds long | Funds short | Contracts long | Contracts short | Net position |
|---|---|---|---|---|---|
| 8 September 2026 | 34 | 32 | 4,845 | 9,106 | -4,261 |
| 15 September 2026 | 33 | 35 | 4,278 | 9,916 | -5,638 |
| 22 September 2026 | 32 | 36 | 4,033 | 10,017 | -5,984 |
| 29 September 2026 | 33 | 41 | 3,706 | 11,743 | -8,037 |
| 6 October 2026 | 31 | 47 | 4,462 | 13,983 | -9,521 |
| 13 October 2026 | 34 | 46 | 5,238 | 16,098 | -10,860 |
Three things stand out.
The net short more than doubled in five weeks. It went from 4,261 contracts on 8 September to 10,860 on 13 October, the biggest net short since 13 May 2025.
This is new selling, not old positions. Short contracts rose by 6,992, or 77%, the fastest five-week build in fund shorts since July 2015. Long contracts barely moved, up 393. Funds are not just giving up on palladium. They are actively betting on lower prices.
More funds are joining the short side. 32 managed money traders were short on 8 September. By 6 October there were 47, the most since May 2025, and 46 a week later. The long side has stayed at about 31 to 34 funds the whole time.
Fresh Shorts, Rising Open Interest
When a market falls and open interest rises, new positions are being opened. That is exactly what palladium shows.
| 8 September 2026 | 13 October 2026 | Change | |
|---|---|---|---|
| Open interest | 17,632 | 23,942 | +36% |
| Fund shorts | 9,106 | 16,098 | +77% |
| Fund shorts as % of open interest | 51.6% | 67.2% | +15.6 points |
| Funds short | 32 | 46 | +14 |
Open interest is at its highest since December 2025. Fund shorts now make up two-thirds of every open palladium contract. Since 2006, that share has been higher in only about 4% of weekly reports, and the last time was 13 May 2025.
Compare that with gold. In our gold note we showed that nine-tenths of the gold selling was funds closing longs. Palladium is the opposite case. When gold, silver and palladium all fall at once, the COT report tells you which ones are being sold out of and which ones are being actively shorted.
How Extreme Is the Palladium Short?
| Measure | 13 October 2026 | What it means |
|---|---|---|
| Net position | -10,860 | Biggest net short since May 2025 |
| Z-score (52 weeks) | -2.78 | Far below the one-year average |
| COT Index (3 years) | 31 | Lower third of the 3-year range |
| Record net short | -16,210 (6 August 2024) | Today is about two-thirds of it |
| Weeks net short in a row | 31 | Since 17 March 2026 |
Two readings can look like they disagree here. The z-score compares this week with the last 52 weeks, and on that view the short is extreme: funds were briefly net long as recently as early March. The COT Index looks at three years, and the deeper shorts of 2024 and early 2025 keep it at 31. Our z-score guide and COT Index guide explain why we show both.
Palladium has been a short for funds for most of three years. Managed money was net short in 188 of the 198 weekly reports since the start of 2023. What changed this autumn is the speed. Almost all of the five-week rise came from new short contracts, at a pace not seen in more than a decade.
Gold vs Platinum vs Palladium
| Metal | Managed money net | Z-score | COT Index |
|---|---|---|---|
| Gold | +111,079 | -0.16 | 31 |
| Platinum | +7,022 | -0.65 | 53 |
| Palladium | -10,860 | -2.78 | 31 |
Funds are still net long gold and platinum. Palladium is the one metal where they are clearly positioned for lower prices. COTInsight's VS comparison mode (Ultimate) puts any two markets side by side, so you can watch platinum and palladium positioning split in one view.
On the supply side, Nornickel, the largest producer, has said it expects the palladium market to be in surplus in 2026. A surplus story plus a falling price is the kind of backdrop that draws trend followers to the short side.
Why Crowded Shorts Matter
A crowded short is a double-edged setup. It confirms that the fast money agrees on direction. It also means that a large group of traders will have to buy back if the price turns, and in a small market like palladium, with under 24,000 contracts of open interest, that buying can move price quickly.
Our study of how long extreme positioning lasts measured 3,192 episodes across 217 markets: the median extreme lasts about three weeks, and many get more extreme before they turn. That is why we read each market on its own record. The Historical Outcome Analyzer (Ultimate) shows what palladium itself did 4, 8 and 12 weeks after every past reading like this one.
What to Watch in the Next Reports
- The short count. 46 funds short is near the 2025 high. A push past 50 would mean the trade is still attracting new sellers.
- Open interest. If open interest falls while the price rises, shorts are covering. That is the first sign of a squeeze.
- The long side. Long contracts ticked up to 5,238 in the latest report. A sustained rise would mean some funds are starting to bet on a bottom.
- Gold and the Fed. The Federal Reserve meets on 27 and 28 October. Palladium often trades with the precious metals complex on rate news.
The next COT report, with positions as of Tuesday 20 October, is released on Friday 23 October at 3:30 PM Eastern.
How COTInsight Tracks This Every Week
Spotting a short build like this in raw CFTC tables means tracking positions, trader counts and open interest week after week. COTInsight does it the moment the report lands.
- Free and Pro show palladium's net position, z-score, COT Index and regime every week. Pro adds 10 years of weekly history and CSV export, so you can put today's short next to the 2024 record.
- Ultimate adds trader counts and positioning structure, which is how you see 14 more funds join the short side, plus the full archive back to 2006, PDF reports, weekly AI commentary, VS comparison and the REST API.
- The Historical Outcome Analyzer (Ultimate) shows palladium's own track record after readings like this one. We tested that approach on 46 futures markets: tendencies picked on the first half of each market's history and scored only on the second half pointed the right way 56.1% of the time at 8 weeks, against a normal rate of 50.7%. The full test is in our guide to trading the COT report.
- The COTInsight TradingView indicator (Ultimate) plots the COT Index, z-score and regime right under your palladium chart, so you see the short building next to price.
See pricing or open the dashboard. New to metals positioning? Start with our COT guide for gold traders, which covers the whole precious metals group.
Frequently Asked Questions
Why is palladium falling in October 2026?
Hedge funds are actively shorting it. Managed Money grew its NYMEX palladium shorts by 77% in five weeks to 13 October, to 16,098 contracts, and the number of funds short rose from 32 to 46. Palladium futures fell about 22% from late August to about $1,113 on 13 October.
Are hedge funds short palladium?
Yes. Managed Money was net short 10,860 contracts on 13 October 2026, the biggest net short since May 2025, and has been net short every week since 17 March 2026.
Is palladium crowded short?
On one-year positioning, yes. The z-score is -2.78, the most extreme among the major metals, and fund shorts equal 67% of open interest. On a three-year view the COT Index is 31, because the shorts of 2024 and early 2025 were deeper.
Could palladium see a short squeeze?
A crowded short in a small market can unwind fast if the price turns, because short sellers have to buy back. The signs to watch are falling open interest with a rising price and a drop in the number of funds short.
What does the palladium COT report show this week?
On the report for Tuesday 13 October 2026, Managed Money held 5,238 long and 16,098 short NYMEX palladium contracts, with 34 funds long and 46 short. The next report, for 20 October, is released on Friday 23 October.
Where can I see palladium COT data every week?
COTInsight scores palladium's positioning every Friday, with z-score, COT Index, regime, trader counts and outcome history. The palladium market page has an overview, and the full readings are in the dashboard.
Summary
Palladium is falling and hedge funds are pressing the move. Between 8 September and 13 October 2026, Managed Money grew its NYMEX palladium shorts by 77% and took its net short to 10,860 contracts, the biggest since May 2025. 46 funds are now short, fund shorts equal two-thirds of open interest, and the z-score of -2.78 is the most extreme in metals. That is a trade with strong conviction behind it, and also one with a lot of buying to do if it turns.
Data: CFTC Commitments of Traders, Disaggregated report, futures and options combined, NYMEX palladium, through 13 October 2026. Prices are front-month palladium futures on report Tuesdays. Past results do not guarantee future results. Not investment advice.