Palladium is more precious than gold. Again

Gold, remaining a "safe haven" for investors, lost its price position. This time, the main metal is palladium, for the first time since 2001. The asset has been growing very impulsively since the beginning of the year, despite the fact that the bullish trend began in mid-August 2018 and is still ongoing. Price growth since the beginning of this trend was about 45%, and only in 2019 the metal added 13% of the cost.
Today, the historical maximum for this asset has been renewed. The highest point is $ 1,396.4 / ounce on an open-ended futures contract and $ 1,345.7 / ounce on a futures contract for delivery in January on NYMEX.

The fundamental factors that support palladium growth are:
• expectations of increased / record demand for it from the automotive industry, where it is used in the production of cars with gasoline engines;
• expectations of lower supply from major producing countries.
According to Norilsk Nickel, the largest producer of palladium, the deficit in the market will continue until 2025. The deficit is estimated to be in the region of 3-8% of consumption. In this case, too high of the price of the metal can lead to its replacement by platinum in the automotive industry; therefore, such an price increase is not beneficial for any of the parties in the long term.

Olymp Trade Review