The 26-year-old Portugal international has been repeatedly linked with Wolves in recent weeks and is on the club’s list of summer targets.
Palhinha is expected to be available for an initial fee of around £17million but while negotiations are ongoing, no agreement has yet been reached. Fulham are also thought to be keen on his signature.
A busy summer seems likely at Molineux yet the size of the club’s budget will be dictated by outgoings, with the biggest question mark still the future of Ruben Neves.
The 24-year-old, currently away with Palhinha on international duty, has been strongly linked with a move away but Wolves will not sell on the cheap and are expected to demand a fee of up to £70m.
Selling Adama Traore would bring in considerably less than that. With only 12 months remaining on his contract, the Spain international is likely to depart but suitors for now are thin on the ground following his underwhelming loan stint at Barcelona.
Veteran midfielder Joao Moutinho is one player Wolves want to keep but are yet to reach a breakthrough in talks over a new contract. Morgan Gibbs-White has also been offered improved terms, despite having signed his most recent contract last September, with interest from Nottingham Forest and Southampton in the attacking midfielder.
Supporters are continuing to give their backing with 95 per cent of the club’s 22,000 season ticket holders renewing, despite prices rising for the fourth year in succession.