Palladium trade: Palladium 2023 Data 1984-2022 Historical 2024 Forecast Price Quote Chart
Price action trading looks for patterns in price movements to predict the future direction of the market. If recent price action indicates the palladium price could rise, you can open a long position. On the contrary, if it indicates the price could fall, you can take a short position. Palladium futures surged above $1,600 per ounce for the first time since February 9, helped by prospects of robust Chinese demand and a weaker dollar. In other news, China’s new car sales increased by 9.7% to 2.45 million units in March, and the automobile output reached 2.58 million units, up 15.3% from a year earlier. On the supply side, major commodity producer Norilsk Nickel expects the planned plant maintenance to reduce output by 8% to 14% this year.
The market rebounded in the first few months of 2022, briefly trading back above $3,000 in March as traders anticipated a shortage of supply from Russia after its invasion of Ukraine. Palladium usage in the automotive industry has grown as various countries have introduced strict carbon emission standards. But the rollout of electric vehicles is expected to erode demand as they do not use catalysts. Demand – Demand for palladium is mostly from companies that manufacture catalytic converters. The biggest of these companies are Johnson Matthey, Continental, and Katcon Global.
That drove palladium prices close to record highs in response to the war between Russia and Ukraine. South Africa, which has the world’s largest palladium reserves, produced 40% of global supply in 2021. Learn more about palladium trading – from how the market works and what drives the prices, to different types of instruments and trading strategies.
What is Palladium?
Palladium Futures are available for trading in London Platinum and Palladium Market and on the New York Mercantile Exchange. With this in mind, you could apply technical and price action strategies to predict the future of the price. In technical analysis, you will use indicators like the moving average and Bollinger Bands to predict the future of the price. On price action, you will use movements like triangle patterns and head and shoulders to predict the next price action. The price of palladium has moved significantly higher, becoming the best-performing metal for more than two years in a row. The reason for this is that governments in Europe and China are starting to be very serious about compliance issues.
Fundamentally palladium looks to be in an excellent position, with automotive demand continuing to grow, supplies of the metal constrained, and investment interest in the market growing. Buying on breakouts of dips will allow traders to capture most of the upside potential in palladium. Increasing demand from China and India will help prices, but because supplies of palladium are also limited the metal faces a strong uptrend that could last for years to come. The best palladium trading strategy will depend on your risk tolerance, portfolio size and goals, and whether you want to focus on short-term or long-term price action.
Lawrence has served as an expert witness in a number of high profile trials in US Federal and international courts. Jump back up to our breakdown on ways to trade palladium, or see the live palladium spot price chart for yourself. CFDs allow traders to speculate on the price of palladium without owning the asset. Futures are a derivative instrument through which investors make leveraged bets on commodity prices. The contracts trades globally on the CME Globex electronic trading platform and have a variety of expiration months.
Palladium trading explained: How to trade palladium
The industrial unit of the company sells and distributes palladium to industrial and commercial users. Rather than investing in the commodity itself, with our Next Generation platform, you also have the option to spread bet or trade CFDs on a range of palladium stocks. Palladium stocks are the shares of companies that are involved in dealing with palladium, whether this be mining, refinement or production of other consumer goods using the precious metal. Another method of investing in palladium is to trade via a futures contract.
A correction was forced by the rise of the coronavirus pandemic, but palladium could be the first metal to recover as supplies of the grey metal have lagged demand for nearly a decade. That could give traders another excellent opportunity in this most rare of precious metals. But liquidity on the palladium precious metal market is thin compared with other precious metal markets like gold, silver and even platinum. This can drive market volatility even when physical supply and demand are stable.
What Influences the Price of Palladium
Trading options contracts involves agreeing a strike price above or below the current futures contract value where you expect it to reach by the time of expiry. If the futures price moves toward the strike price you will earn a profit; if it moves away from the strike price you lose the premium paid for the contract. With two countries accounting for more than three quarters of global supply, the market is highly susceptible to supply shocks. Since 1989, the primary use for palladium has been in catalytic converters for fossil fuel and hybrid vehicles, which accounts for around 80% of demand. Palladium catalysts trap hazardous emissions when an engine burns fuel. The biggest producers of palladium are by far Russia and South Africa (70-80% of world output) followed by United States, Canada and Zimbabwe.
Industrial demand for palladium is increasingly dominated by the chemical sector. Consumption in this sector has been growing during the past couple of years. The metal is also used in small volumes in the electronics and medical industries as well as for fine jewellery as an alternative to platinum. Palladium’s abnormal capacity to absorb hydrogen – 900 times higher than its own volume – makes it extremely valuable for the nuclear industry. The benefit of doing this is that there is a lot of liquidity in the market. This means that you will always have simple ways to exit once your target is reached.
Knowing that AvaTrade offers its clients trading of this rather rare instrument while enjoying the all the quality services provided by AvaTrade. As mentioned before, some 85% of palladium usage goes to the auto industry. As more people buy and use cars, the price of palladium will rise as the demand rises. It is also true, naturally, to other industries that consume palladium, but as the auto industry is the main one by far, it has the most effect on its price. Also, Palladium demand is expected to continue rising, due to tightening auto emission regulations in Asia, the globe’s biggest consumer. As Russia supplies nearly 42% of the global usage of palladium, and another 38% is provided by South Africa, they gain control over the market and can affect the price.
It is white in color and is found mostly in South Africa, Zimbabwe, and Russia. Other metals in this category include rhodium, platinum, ruthenium, osmium, and iridium. However, options also have a strike price, which is the price above which the option finishes in the money. In this guide, we explain the main reasons why some traders choose to trade palladium and what experts think about the commodity. The palladium price has soared to record highs in recent years as supply has not been able to keep pace with growing demand.
Palladium producers also mine and refine other metals, so this can diversify your holdings but increase your exposure to those other markets. You can also use ETFs, options and CFDs to trade on palladium company share prices. You can trade palladium on the spot market through an online palladium broker or exchange, buying and selling set amounts of the metal at the current, or spot, market price. Prices for palladium commodities are strongly affected by the value of the US dollar and tend to move in the opposite direction. When the value of the dollar falls against other currencies, palladium prices tend to rise and when the dollar strengthens, palladium prices tend to fall. Russia accounted for 37% of global palladium production in 2021, according to the United States Geological Survey .
Palladium continued to fall in value to $170.35 in May 2003, its lowest level since 1997. Palladium is a silvery-white, lustrous metallic element that is one of the six platinum group metals along with platinum, ruthenium, rhodium, iridium and osmium. As a catalytic converter, platinum is placed in the exhaust pipes to help reduce the amount of carbon released in the atmosphere. Most analysts who follow the palladium market pay attention to its price relationship with platinum. Palladium spot prices have been hitting all-time highs this year, nearing $3,000 per ounce. Purchasing a basket of commodities helps protect investors from the volatility of any individual commodity.
Trading palladium through commodity indices
Before you open a position in the commodity, you could have a clear palladium trading strategy in place. There are several different approaches you can take in designing your trading plan. A CFD is a type of contract between a trader and a broker that aims to potentially profit from the price difference between opening and closing the trade. ETFs offer the convenience of trading stocks on exchanges during market hours while providing more portfolio diversification than investing in a single company.