I've been tracking the price of that oddball strategic metal palladium for a few years now. I've concluded that the time to be bullish was last summer (and I was) but now I am thinking that it's not too late to jump in for more gains.
Technical analysis argument with cool charts here
Note that the capitulation phase already took place last summer. Also note that the price wedge has become increasingly congested until just this week, when it broke to the upside. Surely this is in part due to the Ukraine situation, which is fine: that's exactly the kind of catalyst the metal needs to get back in the news.
There are also fundamental arguments to be made for the commodity. Palladium is not heavily mined; much of what is consumed comes from above ground supplies. In recent years Russia has been selling off amounts from their giant stockpile of Palladium (leftover from the Soviet era) at a pace of about 2 million ounces a year.[wikipedia] And yet, in spite of that, the price has continued to stay in a relatively narrow range.
(The amount of palladium in the Russian stockpile is a state secret. Some people consider it to be immense while others think that they might be close to depletion; I don't pretend to know--but I don't think it matters much.)
More recently, news has come out that indicates that Russia will cease supplying the world with palladium. See Secret Russian Palladium Stockpiles Dwindle & May Disappear In Near Future, Supporting Prices which reveals that the 2 million ounces will be reduced to 100,000 ounces, and even that will be reserved for Russian industry. Indeed, Russia has scarcely sold any palladium in 2014 as the price has drifted higher.
Finally, for the tin-foil hatters out there, there is the widely held conspiracy theory that the price of gold and silver is and has been heavily manipulated by central banks. Interestingly, this action has ripples throughout the entire precious metals complex, which means that even the strategic and industrial metals like palladium suffer from temporary price suppression. If the tin-foil hatters have it right in that regards, that means it's just a matter of time before the laws of economics catch up with the short-term manipulations.
I'm not betting the farm on this, but last week I decided to add to my already profitable palladium (PALL) holdings. I'm not saying today is a perfect entry point, but I do see palladium breaking $1000/oz in 2014. Perhaps sooner than expected.
Submitted March 04, 2014 at 03:35PM by Snootwaller http://ift.tt/1oo9ZZh
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