Palladium Rally Approaches 2011 Highs
Today’s Spotlight Market
Platinum prices have also rallied of late, though not quite to the extent of Palladium. Private forecasters believe that there is currently about a 6-month supply of Platinum globally, which should provide some cushion for end-users should the mining strikes in South Africa be settled shortly. However, should South African production remain off-line through the summer, we may need to see prices rise in order to ration demand.
Fundamentals ?
Palladium continues to be the best performing of the major precious metals, with prices approaching highs not seen since 2011, as traders fear that supplies are not keeping up with demand.? Violence has erupted in South Africa, where precious metals miners have been on strike for over 4 months. This has curtailed Palladium supplies out of one of the world?s largest producing nations, responsible for about one-third of the global Palladium production. A report by Johnson Matthey suggests the Palladium market may see a deficit of over 1.6 million ounces in 2014, vs. just over 370,000 ounces in 2013. The wild-card for the Palladium market will be Russia, which is the largest global producer of Palladium. In 2013, Russia was responsible for just over 40% of global Palladium supplies, and it appears that sales from state-owned reserves may cease this year, as domestic inventories have fallen to near zero. The possibility of additional western nation sanctions against Russia for its involvement in Ukraine may also limit supplies of Palladium to the market this year. ?
Technical Notes? – ? View Today’s Chart
Looking at the weekly continuation chart for Palladium futures, we notice prices approaching the top of a multi-year continuation pattern as prices near 33-month highs. Prices are beginning to pull away from the 20-week moving average, as the 14-week RSI remains strong, with a current reading of 67.47. 850.20 is seen as the next resistance level for front-month Palladium, with support seen at 745.70.
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