2019-01-19 2582Secondary browse
Share to： In 18 months, 76%! Could palladium overtake gold in the next few years?
Palladium has led commodities higher since 2016, up 76 percent in 18 months. A lack of supply and a large number of single entry are two factors pushing up palladium prices. In the longer term, analysts say, a correction in palladium could be followed by a rebound, and it's not impossible to beat gold.
Palladium has risen 28% this year as demand outpaces supply for the sixth year in a row. In mid-june it hit its highest level since 2001 at $928. Even more striking, palladium prices have been on an upward swing since 2016 and are now up 76%.
Spot palladium was down 0.17 percent, or $1.53, at $888.55 an ounce at 11:38 GMT. The lack of palladium supply has been a big driver of the precious metal's recent rally. The world's major palladium producers have all but stopped adding to supply since 2012, but demand for the metal has outpaced supply in recent years as rising car consumption continues to drive demand.
Caroline Bain, commodities analyst at Capital Economics, said that while palladium inventories in recent years could help meet consumer demand, the supply source may be drying up. Meanwhile, Brad Yates, a trader at U.S. -based precious metals producer Elemetal, said the market was in a severe shortage, with spot palladium hard to come by. 'palladium's fundamentals are the strongest of any commodity,' said Rene Hochreiter, analyst at Noah capital markets LTD. 'palladium could easily outperform platinum in the short term.' The massive multi-entry futures market also sent a signal that traders were based on buying palladium.
The rise in bullish sentiment for palladium was another factor driving prices higher, according to the latest traders' positioning report from the U.S. commodity futures trading commission. Palladium's net speculative long position rose to 24,546 lots in the week ended Tuesday, although both speculative and short positions increased. Notably, net long palladium holdings by fund managers for the week of the report climbed to their highest level since 2013.
The long term: palladium could be heading for $1,200. On a technical note, financial blog ElliottWave-Forecast said palladium has been volatile since its low in 2003, and the rally in the last year or so could open a new uptrend. On current trends, palladium is likely to see a downward correction for the rest of the year, followed by another rally in early 2018 that could push it above the $1,200 an ounce line. With bitcoin hitting $2,168 at one point this year, surpassing gold's all-time high, and the ElliottWave Forecast ahead, palladium is also on track to surpass gold.
Palladium has risen 28% this year as demand outpaces supply for the sixth year in a row. In mid-june it hit its highest level since 2001 at $928. Even more striking, palladium prices have been on an upward swing since 2016 and are now up 76%.
Spot palladium was down 0.17 percent, or $1.53, at $888.55 an ounce at 11:38 GMT. The lack of palladium supply has been a big driver of the precious metal's recent rally. The world's major palladium producers have all but stopped adding to supply since 2012, but demand for the metal has outpaced supply in recent years as rising car consumption continues to drive demand.
Caroline Bain, commodities analyst at Capital Economics, said that while palladium inventories in recent years could help meet consumer demand, the supply source may be drying up. Meanwhile, Brad Yates, a trader at U.S. -based precious metals producer Elemetal, said the market was in a severe shortage, with spot palladium hard to come by. 'palladium's fundamentals are the strongest of any commodity,' said Rene Hochreiter, analyst at Noah capital markets LTD. 'palladium could easily outperform platinum in the short term.' The massive multi-entry futures market also sent a signal that traders were based on buying palladium.
The rise in bullish sentiment for palladium was another factor driving prices higher, according to the latest traders' positioning report from the U.S. commodity futures trading commission. Palladium's net speculative long position rose to 24,546 lots in the week ended Tuesday, although both speculative and short positions increased. Notably, net long palladium holdings by fund managers for the week of the report climbed to their highest level since 2013.
The long term: palladium could be heading for $1,200. On a technical note, financial blog ElliottWave-Forecast said palladium has been volatile since its low in 2003, and the rally in the last year or so could open a new uptrend. On current trends, palladium is likely to see a downward correction for the rest of the year, followed by another rally in early 2018 that could push it above the $1,200 an ounce line. With bitcoin hitting $2,168 at one point this year, surpassing gold's all-time high, and the ElliottWave Forecast ahead, palladium is also on track to surpass gold.
For now, the ratio of gold to palladium remains at 1.44-to-1, but it has been on a downward path since 2016, when it began a volatile slide. If palladium holds on to its current strong rally, it may not be out of the question for the metal to fall below parity in the next few years.
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