Gold 
“Palladium continued on its downward trend that has been in motion since early October. Prices fell to an intraday low of $1,539 on 6 February, the lowest level since the middle of December 2021. The current downtrend in palladium actually goes back all the way to May 2021.
Prices got a sharp, temporary lift during 2022 when Russia invaded Ukraine and the palladium price spiked higher on concerns of supply disruptions due to sanctions imposed by the West on various Russian businesses. In the absence of those concerns, around Russian mine supply disruptions, palladium prices could have been at lower levels than they presently are.
While these concerns are still alive, they have been put on the backburner, with markets refocusing their attention on palladium’s deteriorating fabrication demand fundamentals. Palladium prices are expected to consolidate around $1,600 in the near term. In the absence of any supply disruptions out of Russia or South Africa, the path of least resistance for palladium prices is lower. It would not be surprising to see palladium prices drift toward $1,360 or even $1,300 as the year progresses.
Palladium fabrication demand faces headwinds on various fronts ranging from macroeconomic risks to changing demand trends within the auto sector. The possibility of a recession is expected to weigh on demand for passenger vehicles over the course of this year. If a recession does occur, it would depress vehicle demand even more.
But in addition to this threat, palladium fabrication demand also is facing challenges from changing demand patterns within the auto sector. The high price of palladium has resulted in autocatalyst manufacturers reintroducing platinum into gasoline autocatalyst. Additionally there is an ongoing loss in the market share of internal combustion engine vehicles to electric vehicles, which will further eat into the demand for palladium. All of these demand side changes, which will impact both the short term and long term, are being met with rising palladium mine supply, with many mining companies developing or focusing on palladium rich ore bodies, another factor that will act as a medium to long term headwind to palladium prices.”
*This information is solely an excerpt of a third-party publication and is incomplete. Please subscribe to the referenced publication for the full article. This is not an offer to buy or sell precious metals. Investors should obtain advice based on their own individual circumstances and understand the risk before making any investment decision.
