Is Palladium Ready To Break To New 2013 Highs?

| November 7, 2013 | 0 Comments

palladiumThe palladium market is starting to heat up…

As you may know, the precious/industrial metal has been stuck around the $750 an ounce price area since mid-October.  Investors have been unwilling to push the metal too far in either direction due to uncertainty surrounding the Federal Reserve’s tapering program.

But that’s changing this morning…

As I write, palladium futures are up $12.60 to trade at $762.90.  But more importantly, the metal is breaking through a very important technical resistance zone.

Let me show you what I mean…


As you can see, each time palladium rose to technical resistance (red line) in 2013, sellers quickly took the metal lower.  On the other hand, each time the price dropped to support (blue line) bulls took control of the market.

What you see above is classis example of a range bound market.

But this range trading is likely coming to an end… 

You see, even though palladium has traded at resistance over the past few weeks, bullish investors have held their ground.   The selloff that usually occurs at this important technical resistance area simply hasn’t happened.

And that’s a very good sign for anyone bullish of palladium!

This morning’s upward push above technical resistance could very well mark the beginning of a major breakout for palladium.

And remember, underlying fundamentals are still wildly bullish…

Just about every commodity analyst agrees a large structural deficit is set to consume the global palladium market in coming years.  In fact, Morgan Stanley (MS) believes demand will outweigh supplies by 1.33 million ounces by early 2014.

And they’re not the only ones…

Credit Suisse (CS) estimates the hefty deficits will last through 2016.  And to take it a step further, consultants at CPM Group see the supply shortage lasting through the end of the decade.

How high can the metal run?

Estimates compiled by Bloomberg show the median palladium target is $850 an ounce by 2015.  However, I believe the metal will achieve that level much quicker than anybody realizes.

In fact, due to the highly bullish technical pattern you see above, palladium will likely be trading at $850 by mid-2014.

How do you capitalize on the looming rally?

Without a doubt, the easiest way to take advantage of rising prices is through a commodity ETF.

The ETFS Physical Palladium Shares (PALL) holds physical palladium in vaults located in Zurich, Switzerland and London, England.  As a result, the day-to-day price of PALL reflects changes in the price of spot palladium.

By choosing PALL, you steer clear of the complications and risks involved with futures contracts.

Keep an eye on palladium folks…

This morning’s breakout is likely the start of a major change in price for the metal!

Until Next Time,

Justin Bennett

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Category: Palladium

About the Author ()

Justin Bennett is the editor of Commodity ETF Alert, an investment advisory focused on profiting from the ebb and flow of important commodities via ETFs. The commodity veteran and options specialist is also a regular contributor to the Dynamic Wealth Report. Every week, Justin shares his thoughts with our readers on a variety of commodity-related topics. Justin is also a frequent contributor to Commodity Trading Research’s free daily e-letter. And he’s the editor of another highly successful and popular investment advisory, the Options Profit Pipeline.