Palladium (XPD/USD) price is currently retesting the $1272.4 resistance level. At press time, the scarce metal is trading at $1263.7. As shown in the chart below, the price for Palladium has been trading within the $2900-$1500 price range since 2020 before breaking the range in May 2023.
The DXY, which measures the dollar’s strength against global currencies, fell by 0.36% on Thursday before the release of US CPI data. The analyst expects the inflation rate to rise to 3.3%. A stronger US dollar typically lowers commodity prices like palladium, but the DXY’s decline helped palladium prices rise by 0.67% today.
Nornickel, A Russian company producing 40% of the global palladium output, has forecasted a surplus of 300,000 ounces in 2024, compared to a deficit of 200,000 ounces in 2023. The company also stated that in 2022-2023, car companies sold their unused palladium stocks to meet the increased demand for the metal and prevent a price spike.
In other news, the electrification of vehicles has been on the rise, with 15 million EVs sold this year. This has significantly impacted the demand for palladium, which is used in producing catalytic converters. Analysts expect the demand for palladium to decline by 1.5 million to 2.25 million ounces due to the increasing adoption of EVs. This can significantly impact the Palladium price in the coming years.
The chart for XPD/USD shows that the price is consolidating around the 2019 low of $1272 as DXY continues to show strengths. As mentioned above, the price has been trading between the $2900-$1500 price range and only broke the range a few months ago, in May of 2023
A palladium price prediction of $1100 may become a reality if the bears fail to hold the $1270 level. $1100 was the peak in 2018 and is also a 0.718 Fibonacci retracement level. To avoid this bearish outlook, the price must break the trend line and reclaim the $1500 level.
In the meantime, I’ll keep sharing the updated Palladium forecast and my personal trades on my Twitter, where you are welcome to follow me.
This post was last modified on Aug 10, 2023, 13:29 BST 13:29