Rumors that the Russian government will withdraw from the palladium market are appearing more credible all the time. If this happens, the current supply deficit and high prices may only be a prelude of future market conditions.
Last year, palladium prices exceeded expectations, but the metal, has also lost some shine with some investors. However, if predictions are correct and the downfall is temporary, palladium may still be full of opportunity.
Except for a ten-day period from March 14th to the 24th when palladium prices fell off a cliff and then steadily rebuilt, the impact of the Japanese troubles on the price of palladium has been limited.
The tight supply of palladium in 2011 will encourage higher prices for the metal over the course of the year. Russian state stockpiles are rumored to be dwindling and may run out because of the increased industrial demand for the metal. In South Africa the ability to increase production is hampered by a lack of reliable electricity. These factors play into the rising expectations for palladium prices in 2011.
Although investing in metals is always risky business, analysts are pinning palladium and platinum as safer bets over the long run.
Analysts are optimistic that bullish trends will continue to lend a shine to precious metals in 2011, namely platinum and palladium.
Following its recent dramatic rise, the question on everyone’s lips is what will the future bring for palladium price prospects in the short, near and long-term time horizons. Answers to these questions depend on both demand and supply dynamics for the metal.
Palladium’s price point has risen nearly 50 percent during 2010, nearly twice that for gold and three times that for platinum, palladium’s chemical cousin.
Republican Congressman Denny Rehberg is pushing for new eagle coins, which would contain one troy ounce of 0.9995 palladium and carry a legal tender face value of US$25, through a bill called the American Eagle Palladium Bullion Coin Act of 2010.
Weak auto sales numbers and the fears of a double-dip recession hindered the price of palladium in early July. However the metal has been rebounding due to better than expected earnings in the US, as well as on the promising news of European bank stress tests.
Get our independent commentary on palladium trends and companies delivered to your inbox.
