WEEKLY TREND: UP
Fundamental Overview:
- PALLADIUM PRICE ACTION: Palladium has fallen around 7% (around 170 dollars) since the beginning of the week. Palladium fell to its lowest rate in two months (2464). Palladium has lost around 17% since it reached its all-time high of $3015 back in May 2021.
- CHINA IS THE LARGEST PLATINUM AND PALLADIUM CONSUMER IN THE WORLD WHICH COVERS ONE THIRD OF GLOBAL AUTOMOTIVE PRODUCTION: Palladium finds use in car’s catalytic converters, meaning that if demand for cars continues to rise, therefore, demand for Palladium could rise as well. Recent data showed that the Chinese economy has continued to recover along with its car industry, which is one of the largest consumers of Palladium and Platinum. China reported Q2 GDP growth rate of 7.9% year on year. That being said, the demand for Palladium may rise, which could support Palladium prices. During the first half of this year, China sold 12.891 million vehicles and produced 12.569 million vehicles, up 4.4% and 3.4% when compared with the same period of 2019.
- ANALYST OPINION (UBS/MORGAN STANLEY/CITIGROUP): UBS cut its forecast for palladium mine supply by 545,000 ounces, translating into a deficit of about 1 million ounces and a 10th straight year of market shortfall. UBS forecasts $2900 per ounce this year. MORGAN STANLEY price forecast stands at $2775 per ounce. CITIGROUP forecasts $3200 per ounce.
Technical Overview:
- LONG TERM UPTREND: Despite the most recent sell-off, Palladium managed to stay above it long term uptrend line. This could suggest an upward recovery as long as it stays above the uptrend (black) line.
- 14-DAY RELATIVE STRENGTH INDEX (RSI): The 14-Day RSI has fallen below the oversold threshold of 30, which indicates that Palladium has been oversold as of late. This, in turn, signals a potential upward correction.
- RESISTANCE AND SUPPORT LEVELS: If Palladium manages to stay above the uptrend line and speculators gather up to trade on 14-Day RSI oversold signal, then it could be expected the prices to start recovering, targeting Resistance 1 of 2670. If, however, the prices fail to uptrend line, then it could be expected Palladium to continue falling and target Support 1 of 2295.
Graph: Palladium, Daily
Current Price: 2480
|
PALLADIUM |
Weekly |
|
Trend direction |
|
|
3015 |
|
|
2860 |
|
|
2670 |
|
|
2295 |
|
|
2190 |
|
|
2100 |
Example of calculation based on weekly trend direction for 1.00 Lot*
|
PALLADIUM |
||||||
|
Profit or loss in $** |
53,500.00 |
38,000.00 |
19,000.00 |
-18,500.00 |
-29,000.00 |
-38,000.00 |
|
Profit or loss in € |
45,675.74 |
32,442.59 |
16,221.29 |
-15,794.42 |
-24,758.81 |
-32,442.59 |
|
Profit or loss in £** |
38,940.24 |
27,658.49 |
13,829.25 |
-13,465.32 |
-21,107.80 |
-27,658.49 |
|
Profit or loss in C$** |
67,504.16 |
47,946.88 |
23,973.44 |
-23,342.56 |
-36,591.04 |
-47,946.88 |
* 1.00 lot is equivalent of 100 units
** Calculations for exchange rate used as of 09:00 (GMT+1) 18/08/2021
Fortrade recommends the use of Stop-Loss and Take-Profit, please speak to your Client Manager regarding their use.
*** You may wish to consider closing your position in profit, even if it is lower than suggested one
**** Trailing stop technique can protect the profit – Ask your Client Manager for more details