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Palladium price will not grow forever

Olymp Trade

Having reached an absolute maximum near the psychological mark of $2000 per ounce, palladium began a correction. As a result, it is currently trading at $1900. From the beginning of 2016, price of the metal has grown by more than + 250%, it showed the best profitability in the market of precious metals after rhodium. However, according to some analysts, the price of palladium cannot grow forever, so the potential for its further growth has already become limited. It is worth remembering that after a sharp rise in prices, the same volatile fall is likely to occur. A striking example is rhodium: from mid-2008 to 2015 it lost 92% of value.

The current bullish trend is associated with tightening of environmental regulation. 85% of global demand for palladium comes from the automobile industry, where it is used to produce catalysts in gasoline engines. The greatest demand for palladium comes from China and Europe, where the most stringent requirements for the purification of automobile exhaust gases have been adopted. Production does not keep up with demand and there is already a shortage of palladium on the market. However, if the cost of palladium is too high, it will simply be replaced in production with other solutions, which will adversely affect the price of the metal.

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Source: https://olymptrade.com/
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