Palladium Prices: It’s Getting Ugly!

| June 25, 2015 | 0 Comments

bearish chartPalladium Prices: More Downside Coming?

Palladium bulls just got wiped off the map…

The precious/industrial metal started turning sharply lower in May and hasn’t looked back.  In fact, palladium lost nearly $80 an ounce since June 1st– a 10% drubbing.

Take a look…

Palladium prices, a chart of palladium

As you can see, the recent downturn in palladium prices has been swift and unforgiving.

What’s causing this steep decline?

It’s likely the main culprit is the growing possibility of a Greek default.  If the worst comes to fruition in Greece, there will obviously be considerable worry about the overall strength of the Eurozone economy.

Of course, such worry won’t help automobile sales across Europe.  If sales decline, palladium demand will understandably head south.

Remember, palladium is a key ingredient in catalytic converters, which reduces emissions from cars the world over.  Approximately 70% of global annual palladium production goes into this use alone.

With palladium trading at multi-year lows near $700 an ounce, is there a way to profit off this predicament? 

It goes without saying, additional downside in the metal likely hinges on the outcome of the Greek debt debacle.

As a result, now’s not a great time to make a new bearish bet.

In fact, if a solution is reached between Greece and their creditors, we could see a viscous rally in palladium.

In such a bullish scenario were to arise, you would want to take a close look at the ETFS Physical Palladium Shares $PALL.  The ETF tracks the price of palladium, so any rally in the metal will send $PALL higher as well.

But a word of warning- $PALL is thinly traded.  As a result, you must be extra careful entering and exiting the offering.  And in times of high volatility, the bid/ask spread will likely widen, creating an even tougher trading task.

And what if Greece defaults?

It could get real ugly in palladium.

One look at a long-term chart and you’ll find the metal has technical support at $660 and $600- a lot lower than current prices.  If the bottom really falls out of this market, we could see the metal plunge to the 2012 low at $575.

See for yourself…

Palladium prices, a long-term chart of palladium

As you can see, there’s a lot at stake with the Greek debt crisis when it comes to palladium.

There may be a trading opportunity on the long side of this market if Greece doesn’t default.  However, if a deal isn’t reached, it’s best you just sit back and watch the fireworks! 

Until Next Time,

Justin Bennett

BIO:  Justin Bennett is the head commodity research analyst at Commoditytradingresearch.com.  With over a decade of real world trading experience, he finds ways for you to consistently profit from movements in commodities and the companies producing them.  Sign up for our free reports and commodity newsletter at https://commoditytradingresearch.com/free-sign-up.

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Category: Palladium, Precious Metals

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.

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