uploads///Gold palladium Ratio Analysis

Analyzing the Gold-Palladium Ratio in August 2017

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Aug. 7 2017, Published 12:01 p.m. ET

Palladium skyrockets

Palladium is the precious metal with the highest returns on a YTD (year-to-date) basis. It has risen 28.6% YTD. The other three precious metals have been slower. The growing strength in palladium can also be seen in the palladium-based Physical Palladium Shares (PALL).

To many analysts, it seems like the demand for palladium over platinum in diesel-based car engines led the metal higher. It’s used as a chemical in electronics in addition to being used for dental applications.

The lower demand for metals and higher demand for recycled metals will likely cause palladium demand to surpass its supply. The longer-term prospects for palladium look good based on its demand.

When analyzing palladium (PALL) markets, it’s important to read the gold-palladium spread. The spread measures the amount of palladium ounces it requires to buy a single ounce of gold (GLD). The greater the ratio, the weaker palladium is compared to gold.

The gold-palladium ratio was at ~1.43 as of August 3, 2017. The price of gold was $1,270.2, while the price of palladium was $881.

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RSI level

The RSI (relative strength index) level for the gold-palladium spread is at 50.3. When an RSI level falls below 30, there are chances of a rise in the price. When an RSI level rises above 70, it indicates that there might be a drop in the asset’s price.

Remember, mining companies like Primero Mining (PPP), New Gold (NGD), Kinross Gold (KGC), and Eldorado Gold (EGO) are all impacted by fluctuations in these precious metals.

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