Chart of the Day: Palladium (XPDUSD)
Palladium (XPDUSD) closed at a new record high, extending its run of form and closing higher for the 12th consecutive day. The 8% rally on Friday was its biggest daily gain since 2008.
Demand for palladium continues to outstrip its supply, and the precious metal has closed higher every day this year. Last week’s moves were exponential.
The most common use of palladium is for catalytic converters, which convert the noxious gasses from car exhaust into substances less harmful. Russia and South Africa account for the majority of global supply.
Prices don’t go up forever, and as we can see the move has been extreme, with increasing calls that the move has gone too far, too fast. There have been suggestions for a pullback, perhaps as carmakers move in the long run to platinum (XPTUSD), a substitute, trading below half palladium’s value. Using platinum as a substitute though requires technological innovation and as long as 18 months before a switch could occur. So the underlying supply shortage won’t go away any time soon.
Ready to trade?
It's quick and easy to get started – even with a small deposit. Apply in minutes with our simple application process.
Pepperstone doesn’t represent that the material provided here is accurate, current or complete, and therefore shouldn’t be relied upon as such. The information provided here, whether from a third party or not, isn’t to be considered as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product or instrument; or to participate in any particular trading strategy. We advise any readers of this content to seek their own advice. Without the approval of Pepperstone, reproduction or redistribution of this information isn’t permitted.