The price of palladium continued its upward trend that began on Thursday at the start of the new trading week. Today it reached its highest level in more than 10 months at $1,240 per troy ounce, says Carsten Fritsch, commodities analyst at Commerzbank.
The magnitude of the current price increase seems excessive
“This means that the price of palladium has risen more than 15% in just over three trading days. On Friday, we reported on the trigger for the price jump, namely the US government’s call to the G7 to “consider new ways to reduce Russian revenues in the metals sector, including restrictions on palladium exports. The price increase is likely to have been exacerbated by the covering of speculative short positions.”
“According to the CFTC, net short positions as of October 22 were still around 5,500 contracts. However, positions had already been reduced in the previous weeks. In comparison, the record level of net short positions was reached in early August with 16,300 contracts. It seems that speculative investors have become less pessimistic in their price expectations for palladium.”
“There is more argument for this than the feared tightening of Russian palladium supplies. Low platinum and palladium price levels are likely to lead to production cuts in South Africa. Fears that the transition to electric mobility could mean that palladium will hardly be needed in automobile production in a few years have proven to be exaggerated. However, the magnitude of the current price increase seems excessive to us.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
