Palladium Bullion Surges 17% In 9 Days On Russian Supply Concerns
Commodities / Palladium Apr 19, 2018 - 03:36 PM GMTPalladium bullion has surged a massive 17% in just nine trading days. From $895/oz on Friday April 6th to over $1,052/oz today (April 19th). The price surge is due to palladium being due a bounce after falling in the first quarter and now due to Russian supply concerns.
In a volatile month, precious metals and commodities have been the clear winners so far, with palladium having the greatest gains of all – up 10.7% in April (see table below).
Source: Finviz
Palladium has surged on concerns about supply from Russia which is the world’s largest producer of palladium with various estimates of its contribution to total global palladium production ranging from 40% to 50%.
Russia and increasingly unstable South Africa control more than three-quarters of the world’s palladium supply, according to Johnson Matthey. Global palladium demand outstripped supply by 23 tonnes (25.4 tons) in 2017, so depleted stocks of this very rare and finite metal were already running low. Palladium is a key component in the global car industry and this will cause difficulties for international car manufacturers.
Palladium lease rates are moving higher in London which suggests a shortage of palladium. Some believe, including precious metals analyst David Jensen, that Russia saved the London palladium futures market (paper/ electronic market) in 2001 when physical palladium was in very short supply and lease rates exploded.
Given the increasing tensions of today and the trade and financial war being waged on powerful Russian individuals including Putin and on Russia itself, ‘the Bear’ is less likely to be as forgiving and accommodating today.
Palladium in USD 20 Years – Macrotrends.net
Were Russia to restrict the supply of palladium due to the bombing of Syria against its will or indeed due to the latest round of sanctions, palladium prices will see even greater gains.
Most of the commodities complex has surged this month due to concerns about war in the Middle East and a trade, economic and actual war between Russia and the U.S. The more aggressive latest round of U.S. sanctions from the Trump administration has jolted a broad range of Russia-related assets including natural gas, oil, base metals and indeed precious metals such as palladium.
Stocks have remained buoyant so far but the dollar and U.S. bonds have seen selling pressure. The long term fiscal outlook for Trump’s America is increasingly precarious with $1 trillion plus budget deficits being projected for the foreseeable future.
This makes the dollar vulnerable in the medium and long term and underlines the case for owning the precious metals of gold, silver, platinum and palladium. Larger allocations to gold are merited, then silver and investors should consider very small allocations to platinum and palladium.
The increasingly bullish fundamentals of the global silver bullion market were shown by us yesterday (see chart below). The fundamentals of very depressed silver are arguably even better than palladium. Palladium is not far from all time record nominal highs (see chart above) while silver at just over $17/oz languishes some 65% below its record highs of near $50/oz in April 2011.
Silver is arguably the cheapest and best value asset in the ‘inflated assets’ world of today. Due to the very positive supply demand fundamentals for silver including increasing investment demand from the “prudent smart money”, expect silver to see similar sharp gains once it has a weekly close and breaks out above $18.50/oz.
Listen on SoundCloud , Blubrry & iTunes. Watch on YouTube below
Gold Prices (LBMA AM)
18 Apr: USD 1,346.55, GBP 949.59 & EUR 1,088.95 per ounce
17 Apr: USD 1,342.95, GBP 937.24 & EUR 1,084.57 per ounce
16 Apr: USD 1,344.40, GBP 941.21 & EUR 1,087.62 per ounce
13 Apr: USD 1,340.75, GBP 938.93 & EUR 1,087.35 per ounce
12 Apr: USD 1,345.90, GBP 951.01 & EUR 1,090.99 per ounce
11 Apr: USD 1,345.20, GBP 947.96 & EUR 1,087.86 per ounce
10 Apr: USD 1,335.95, GBP 942.25 & EUR 1,083.46 per ounce
Silver Prices (LBMA)
18 Apr: USD 16.95, GBP 11.93 & EUR 13.70 per ounce
17 Apr: USD 16.63, GBP 11.60 & EUR 13.44 per ounce
16 Apr: USD 16.60, GBP 11.61 & EUR 13.42 per ounce
13 Apr: USD 16.51, GBP 11.57 & EUR 13.40 per ounce
12 Apr: USD 16.66, GBP 11.74 & EUR 13.50 per ounce
11 Apr: USD 16.57, GBP 11.67 & EUR 13.39 per ounce
Mark O'Byrne
This update can be found on the GoldCore blog here.
IRL |
UK |
IRL +353 (0)1 632 5010 |
WINNERS MoneyMate and Investor Magazine Financial Analysts 2006
Disclaimer: The information in this document has been obtained from sources, which we believe to be reliable. We cannot guarantee its accuracy or completeness. It does not constitute a solicitation for the purchase or sale of any investment. Any person acting on the information containd in this document does so at their own risk. Recommendations in this document may not be suitable for all investors. Individual circumstances should be considered before a decision to invest is taken. Investors should note the following: Past experience is not necessarily a guide to future performance. The value of investments may fall or rise against investors' interests. Income levels from investments may fluctuate. Changes in exchange rates may have an adverse effect on the value of, or income from, investments denominated in foreign currencies. GoldCore Limited, trading as GoldCore is a Multi-Agency Intermediary regulated by the Irish Financial Regulator.
GoldCore is committed to complying with the requirements of the Data Protection Act. This means that in the provision of our services, appropriate personal information is processed and kept securely. It also means that we will never sell your details to a third party. The information you provide will remain confidential and may be used for the provision of related services. Such information may be disclosed in confidence to agents or service providers, regulatory bodies and group companies. You have the right to ask for a copy of certain information held by us in our records in return for payment of a small fee. You also have the right to require us to correct any inaccuracies in your information. The details you are being asked to supply may be used to provide you with information about other products and services either from GoldCore or other group companies or to provide services which any member of the group has arranged for you with a third party. If you do not wish to receive such contact, please write to the Marketing Manager GoldCore, 63 Fitzwilliam Square, Dublin 2 marking the envelope 'data protection'
GoldCore Archive |
© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.