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Palladium price, news and analysis:

  • The palladium price, which almost doubled between August last year and a few days ago, has fallen steeply this week.
  • Amid talk of a bubble bursting, further steep losses now seem likely.

Palladium ‘bubble’ bursts

Earlier this week, the chief executive of Anglo American, one of the world’s largest palladium producers, said the rapid rise in the precious metal’s price had created a “bubble”. Mark Cutifani added that its value was likely to remain high for some time but, soon after he spoke, that bubble burst dramatically and further losses now seem likely.

Palladium Price Chart, Daily Timeframe (August 1, 2018 – March 28, 2019)

Latest palladium price chart.

Chart by IG (You can click on it for a larger image)

Palladium is used largely in vehicles’ catalytic convertors and its price hit a low back in August last year of just $826.40 per ounce. By Thursday last week it had almost doubled to a high of $1,616.50 but since then it has tumbled and a major top seems to be now in place even though it is close to oversold territory.

The price has now dropped below the 20-day, 50-day and 100-day moving averages, as well as the 20-week moving average, and a possible level to look out for next is $1,314.68: the 38.2% Fibonacci retracement of the August to March move higher.

Meanwhile, from a fundamental perspective, Cutifani said Anglo American would not be increasing its output of the metal. Moreover, there has been talk of motor manufacturers switching to cheaper platinum in their catalytic converters.

After the latest palladium price moves, that is a strategy they will probably reconsider. However, while bounces in the palladium price can never be ruled out, the trend now seems to be clearly downwards.

Tips on trading commodities

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--- Written by Martin Essex, Analyst and Editor

Feel free to contact me via the comments section below, via email at martin.essex@ig.com or on Twitter @MartinSEssex