uploads///Palladium Candlestick Chart

Will Palladium Show Comparative Strength?


May. 26 2016, Published 4:28 p.m. ET

Palladium’s performance

Contrary to our previous articles, there are a few analysts that may predict that palladium could have a stronger grip over the Market than platinum. According to industry consultant Metals Focus, palladium demand may rise as sales of gasoline-based cars are beating diesel car sales in Europe.

According to automotive sales data, the growth of automobile sales may be driven more by gasoline-based cars. The share of diesel cars has fallen in Europe, from 60% about ten years ago to 39% in 2016.

Palladium’s price of $530.90 per ounce is at a significant 9.8% discount from its short-term 20-day moving average price of $588.80 per ounce. Platinum’s price of $994.80 per ounce is at a 5.1% discount from its 20-day moving price of $1,045.00 per ounce.

Article continues below advertisement

Industry analysts expect that the demand for platinum may be stable in 2016. However, palladium demand may be expected to rise, especially in India and China. The Asian markets, especially China, represent a key growth region for passenger car sales. Auto sales in this region are dominated by gasoline-based engines.The demands for platinum jewelry and industrial uses also seem to be robust.

Miners and funds

Miners that saw a fall in their prices due the volatility and downside risk in precious metals include Kinross Gold (KGC), Harmony Gold (HMY), and New Gold (NGD). These three companies have fallen by 10.2%, 5.8%, and 9.9%, respectively, on a five-day trailing basis. Combined, these three companies make up 6.2% of the VanEck Gold Miners ETF (GDX).

The Global X Silver Miners ETF (SIL) and the VanEck Junior Gold Miners ETF (GDXJ) fell by 3.5% and 3.4%, respectively, on a five-day trailing basis.


More From Market Realist