Falling Supply, Steady Demand: Is Palladium Ready to Break Out?

Jeffrey Christian: So, you’ve got a market that, if you wait and you buy in at $1,050 or $1,000 or $950, you could have a pretty good probability that you could see a 20% or 30% increase in the value of that investment within a couple years on this kind of spike that we just saw June and July. That’s a pretty good return in a hostile economic environment for financial assets.

Sean Brazney: I want to talk about one of the precious metals that doesn’t really get much airtime, palladium. There’s been a couple articles recently out there, one from Sibanye-Stillwater, I believe, out of Johannesburg, talking about petitioning for tariffs on Russian imports. They’re saying Russia’s selling palladium under market and it’s hurting them. So, they’re petitioning for tariffs. I saw an article recently by Stansbury Research saying that expect big gains out of palladium after palladium’s breakout, and any time I start seeing this information hit the internet, it’s always a great thing to bring it up with you in our video. What do you guys see in going forward in palladium right now?

Jeffrey Christian: I think there are great opportunities for intermediate term investors in palladium and in platinum right now. Palladium prices got very high up until 2021, 2022. They come off and since late 2023 until June, they were basically trading between say $800 or $900 on the bottom and $1,100 on the top side. In June and July, platinum and palladium prices spiked higher. Palladium got over $1,300. So, it rose 30%. It’s come back off. I think it’s trading at about $1,170 right now. Our expectation is that it probably will come off a little bit more, and you can see from the price increase in June and July, the capacity for the palladium price to rise and rise again. So, right now you’re sort of saying which falls faster, mine production or auto demand? Auto demand has been holding up pretty well for a variety of reasons, cyclical, secular, and fundamental in the auto industry. So, the demand for palladium has held up relatively well, but mine supply has been falling. You mentioned Sibanye-Stillwater. Sibanye-Stillwater owns a Stillwater mine in Montana and they have put one of their mines there on care and maintenance, and they may close it completely, because it’s sub-economic at $1,100 an ounce it doesn’t make money. So, that’s good, and you look at the palladium market, we look at relatively healthy fabrication demand right now, falling supply, you’re looking at a market that’s been in a surplus for a few years, but the surplus has gotten very small last year. It’s getting even smaller this year and we could see a relatively sizable deficit next year as these mines continue to scale back, and close, and go on care and maintenance, if the auto industry globally hangs in there. If we have a recession, then maybe not such a bullish view, but still a bullish view. So, you’ve got a market that, if you wait and you buy in at $1,050 or $1,000 or $950, you could have a pretty good probability that you could see a 20% or 30% increase in the value of that investment within a couple years on this kind of spike that we just saw in June and July. That’s a pretty good return in a hostile economic environment for financial assets.