Palladium: The Metal in Reversal

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Palladium has gone through a difficult 2024, standing out as the worst performing precious metal. Until November, it accumulated a drop of more than 12%, driven by the strength of the dollar and structural changes in its demand, especially in the automotive sector.

Relevant Short-Term Factors:
1. Automotive Market in Transition: Although the electrification of vehicles is advancing, sales of hybrid vehicles have maintained a significant demand for this metal, which is key in automotive catalysts.
2. Supply Reduction: A recent restructuring at a U.S. mine will reduce global production by approximately 150,000 ounces, creating a tighter market in 2024.

Long-Term Challenges:
The palladium horizon faces fundamental challenges due to gradual displacement by platinum in industrial and automotive applications. The increasing adoption of electric vehicles could further decrease demand, while catalyst recycling will increase secondary supply, exacerbating the risk of an oversupplied market.

Despite certain temporary factors that could stabilize prices in the short term, the market remains in a downtrend, with projections placing the metal below USD 900 per ounce over the next 12 months.

Technical Aspect:
On a technical level, palladium (Ticker AT: PALLADIUM) has its current support at $923.36. Its control zone (POC) is located around $1034.06. RSI is at 45.34% slightly oversold. If we look at the crosses of averages, during the month of November there has been a change and the 50 average has fallen below the 100 and 200. And the 100 average has fallen below the 200. So a clear downtrend has formed.

Conclusion:
Palladium continues to be a volatile choice in the precious metals market. Its performance depends on both supply adjustments and the dynamics of the automotive industry. Although there are opportunities in the short term, the long-term outlook indicates a challenging scenario for this metal, driven by its structural transition.
Ion Jauregui - Analyst ActivTrades





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