Tuesday, February 26, 2013

Palladium May Outshine Gold And Silver In 2013

Since opening December at $682, palladium prices have made a nice run closing last week at $738. Part of this was due to a massive increase in speculative long positions in the futures market on the Fed's announcement of additional stimulus measures last month.
Following the U.S. "fiscal cliff" deal, palladium rebounded strongly at the start of 2013 (along with platinum), rising to $711 on 2nd January, a level last seen in March of 2012. However, it has since consolidated and spiked to over $750 only to pull back to the $730 level on some recent weakness. Much of this weakness was attributed to falling platinum prices (pulled back along with gold), after the Federal Reserve suggested that its quantitative easing program could end sooner than expected.
Palladium's fundamentals can be quite attractive even when its price is on a downward track. Though palladium is a precious metal, it tends to trade differently than its peers, which include gold and silver. Those metals are commonly targeted and monitored for their safe haven appeal and may perform well even in bleak economic conditions. Palladium, which is considered a cyclical commodity, is not generally sought for protection. It tends to perform best when there is a prevalent appetite for risk. During times of economic turmoil or uncertainty, when investors are de-risking, it is common to find palladium prices caught up in the same negative sentiment - thus prices fall and ETF holdings decline.
With regard to the forecast, many (including myself) expect palladium prices to move steadily higher over the next few months and beyond. Given the metal's recent strength, I believe palladium is set to gain some momentum and traction-- mainly due to rising demand and a continued supply deficit. Furthermore, palladium was overlooked for much of 2012 but many believe investors will find the metal more attractive this year and investment demand is therefore expected to be an additional source of support for the market.
Subject to any further developments on the platinum supply side, I would not be surprised to see palladium challenging the $765 level over the next 60 days. Despite the usual profit-taking and the potential of lower platinum prices in March, I still expect palladium prices to maintain an upward trend. Strong support should come from the metal's positive fundamentals due to the expected substantial underlying deficit for the seventh consecutive.
    page 1 / 2


    1. Mr K! Good to hear from you. While you were away, not much changed on the macr-economic front.

      We are still mired in the depths of The Great Recession, several more years to go. Developments in EUrope are finally coming slowly to a head.

      They need several of the PIIGS to default and leave the EUro before their economies can begin to heal. So I take the developments in Italy and Spain etc as positive, in the sense that these things need to happen before we can begin to move on.

      All the Central Banksters have done is protract the length and depth of the crisis by forcing the losses of their fellow criminal Banksters onto taxpayers.

    2. Sorry to hear of the passing of Ink, Mammoth.

      A cat or dog is a family member and valuable friend, always around the house, loyal and happy to see you any time. At least Ink had a good life and was loved, that's all we can do for them.

    3. Thank you GAW and others here, for your kind words about Ink.

      There are some things which neither money, investments, or bribery can not buy.

      Family (pets ARE family, too)& friends should be cherished and feel your love while they are alive.

      I just posted a follow-on comment on The Dungheap, saying a little bit more about Ink so that readers may have a glimpse of my dear departed cat's personality.


    4. Today seems to be profit taking for the shiny metals.

    5. Queenbee, that is taking the shine off of today's comments on the PM blogs.

      Remember: Thou Shalt Not Gloat

    6. In other Investment News, yesterday evening I finally sold a dresser that I'd had for sale on Craigslist for a month.

      Was asking $29 or best offer - which seemed reasonable to me since I had just painted it and it looked very nice.

      Twice I had turned down offers for $20. Would've been willing to let it go for $25, but the buyer did not even try to negotiate the price down.

      I can not recall the last time that it took me this long to sell a dresser; this is an indicator of how strapped folks are for cash these days.

    7. Or things are so good that people are buying retail. Who knows for sure and Craig's list is hit and miss. I tried to sell my 3k pool table for 700.00 The guy no showed on me twice as did another so I just gave up.

      Interesting to me that gold went down about the same time it went up yesterday. While the other three went down Palladium was up. Hmmm Good timing on that story.