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Palladium Continues to Fall. The Bull Market is a Perspective For Now

Olymp Trade

The beginning of May was a new turning point for palladium. The expected correction wasn’t confirmed, bears broke through $1370 and the chart continued to fall. Palladium’s spot price has dropped and is now trading inside the $1310-1340/oz zone. Further decline will bring the price down to another zone previously mentioned in our reviews: $1250-1275. Moreover, last Thursday the price of the metal hit its upper limit.

This creates concerns in the short-term. In the long run, the picture is more optimistic: analysts at Norilsk Nickel predict another year of palladium deficit. Demand also exceeds supply this year, due to the gap between production and consumption. Environmental standards are becoming tougher around the world (in China, the USA, the EU, and India), while the consumption from the automobile industry is growing. Experts believe that next year consumption will increase at a faster pace than a gradual production increase.

It is expected that the excess of demand over supply will remain for another 3-4 years. However, the current situation can be softened due to an increase of refined metal production by South Africa, which accumulated stocks of unfinished material during 2018.

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Source: https://olymptrade.com/
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