Nobody Likes Palladium... They are Nuts to Be So Bearish

The House View

Note: We have nothing on in either of these metals and historically have played long PL against short PA once in a while, but avoid them as short or medium term trading vehicles. That said, bigger moving averages govern them quite nicely.

Palladium

• Palladium has remained extremely volatile in recent weeks, with prices fluctuating above USD 1,000/oz. Considering elevated short positions, we expect prices to stay volatile in the short term.

• With lower sales of electric vehicles this year, supporting palladium demand in autocatalysts, as well as supply cuts in a US palladium mine next year, the palladium market is likely to be tighter than we originally projected. Hence, we raise all our forecasts by USD 100/oz.

• Compared to other precious metals, where we have a constructive outlook, we remain cautious on palladium. Only investors with a high risk-tolerance should consider trading palladium given its low trading volumes and limited market size.

Comment: Two Charts

Palladium may not be a buy. But how can anyone persist in being overtly bearish?

Chart 1: 200 dma

Chart 2: 50/200 DMA cross

Platinum

• Despite an undersupplied market, platinum keeps range-trading as elevated above-ground inventories need to first be reduced to see prices rise, in our view.

• Scrap supply has disappointed in recent years, but we see room for a recovery next year. We still expect the platinum market to be undersupplied in 2025.

• Hence, we retain our modestly positive price outlook and advise investors with a high risk-tolerance to sell the metal's downside price risks.

Comment: We don’t get it

Platinum has 2 things going for it: dwindling new supply, and it is beginning to reflect in Gold and Silver’s light.

So why hasn’t it rallied? Maybe all the ICE cars being taken apart now are contributing to the problem. We don’t get it frankly.. What happens to it if Gold cracks lower?