A hearty boom in commodities has been under way for several years now, but not all metals have participated. One in particular is Palladium, a close relative of Platinum that has many industrial uses. The Palladium/Platinum ratio is touching a significant resistance level of 1/4. More than half of Palladium's demand is driven by its use in catalytic converters for autos. Other significant applications include electronics, dentistry, and jewelry. Palladium is also used in the catalytic process involved with petroleum refining.
From Stillwater Palladium:
Today, palladium is in a unique situation. The metal is in demand from a wide range of global industries, yet is supplied by only a few mines across the world. Thus, any interruption to supply can have a dramatic impact on prices. A perfect example of this occurred a few years ago. The biggest palladium supplier in the world is Norilsk Nickel in the Russian Federation, and in the year 2000, Norilsk’s deliveries of palladium became unreliable. The palladium market then was so tight that supply interruptions resulted in huge price surges. Palladium reached a high of $1090 per ounce in early 2001. Palladium is for the moment in oversupply and at less than a quarter of its high, but questions remain with many about future supply reliability.
Given the potentially unstable balance of supply and demand, and the fact that Palladium is touching significant technical levels, we wonder how long it will be before the metal breaks out on the upside...
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