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Is The Palladium Rally Running Out Of Steam

Is The Palladium Rally Running Out Of Steam?

Palladium had a great run in 2016. Last year palladium out performed most of the popular precious metals like goldsilver and platinum. It surged from a low of $450.00 per troy ounce to a high of almost $775.00 and another 10% in first couple of weeks in 2017. In 2014 the high was around $900 per troy ounce and in 2009 the low was around $172 per troy ounce, so this metal has seen a lot of volatility.


Palladium weekly chart

Currently, most supplies of palladium come from Russia, a country producing more than 40% of global supplies. The next biggest contributor being South Africa which provides for 37% of global demand. The demand for this metal is primarily generated by global automotive industry. Palladium is used in catalytic converters that check fumes from car emissions (used basically in gasoline engines).

The global demand for vehicles is gradually rising but the supply has stagnated. This is resulting in an increase in palladium prices. Furthermore, new exploration for the supply of palladium is also on the rise. As of now, the automobile industry is expecting softer emission norms from the new President-elect Donald Trump, as easier norms will result in softer demand of palladium.

However, on the technical grounds, palladium is facing some key resistance levels. The support which was broken in June 2015 is now acting as a major resistance. More than twice it has tried to break these levels but failed to do so. In case it breaks this resistance then the next hurdle will be around $800.00 and $830.00 price range. If the price doesnít break, the present resistance levels then one can expect it to come around the major support which is at $670.00 to the $680.00 per troy ounce.

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