Connect with us

Commodities

Trade Recommendation: Palladium is Soaring – Best Performing Precious Metal in 2017

Published

on

Several sources are now reporting an increasing supply deficit for palladium in 2017. According to a report by the Financial Times, “the palladium market is witnessing a rising deficit”. This would mark the sixth successive year of significant supply shortages in the palladium market, whereas its sibling platinum this year may be experiencing its first supply surplus in six years.

Best-performing precious metal year-to-date

In addition to this, as we have previously reported here on Hacked.com, palladium has outperformed both gold, silver, and platinum by more than 300% since 2009, and outperformed all other commodities in the Bloomberg Commodity Index so far in 2017.

The chart below shows the price of palladium in US Dollars over the last 12-month period. As you can see, this is a healthy trending market, trading above both the 50 and 100 day moving averages. It is exactly the type of market any trend following trader should be invested in.

Strong fundamental support

Palladium is an industrial metal primarily used as an important component in catalytic converters that reduce the amount of harmful air pollutants from cars. As we have spoken about before, some analysts believe that this will continue to drive the price of palladium higher, as China and other large developing countries are stepping up the fight against air pollution.

Platinum, on the other hand, is used in diesel-fueled cars, which are now experiencing a downturn mainly due to environmental concerns. As the trend of gasoline fuel being favored over diesel continues, the price of palladium is expected to continue to rise at the expense of platinum, and may soon surpass it, despite being known as a “lesser” metal.

Limited and vulnerable supply

Being far rarer than both gold and silver, palladium (and platinum, for that matter) is almost exclusively mined in only two countries; Russia and South Africa. In the case of South Africa, output of this precious metal is under pressure from political instability, labor strikes, high operating costs for miners, and infrastructure problems. The Russian production is relatively stable, but there are almost no new palladium mining operations being started, even as demand for the metal is continuing to grow.

How do I play the surge in palladium?

Probably the best way to play the palladium market is through the ETFS Physical Palladium Shares with the ticker code PALL. This ETF is backed by physical palladium bullion bars stored in its vaults in London and Zurich. ETF’s are in many cases a cheaper option for long-term investments in precious metals, when compared with physical ownership, and they can be traded through most online brokers.

FOREX trading

Many brokers also let you trade palladium on margin in the forex market under the name XPDUSD, as shown in the screenshot below from my Saxo Bank brokerage account.

This is the option I recommend for shorter-term trading, because of the relatively low transaction cost compared with the benefits of the leverage you get. Keep in mind, however, that spreads can be wide for metals like palladium, as there is far less trading activity in them than for example in the gold and silver markets.

Physical ownership

Although physical ownership is sometimes more expensive than simply investing in an ETF, it comes with a good sense of security, has an inherent value for collectors, and is not subject to any third party risks. You can touch and feel your own precious metal without involving the taxman or the bank at any step of the way. It is perhaps the ultimate solution for the small investor who just feels good about keeping a portion of his wealth in a tangible asset.

You may also choose to buy physical bars or coins and have it stored in a vault for you. Great places both for buying and storing precious metals is Hong Kong and Singapore, where you can trade physical precious metals at some of the lowest buy/sell spreads in the world, as well as storing it for a very low cost.

What’s next for palladium

Despite having risen almost 50% over the last 12 months, palladium may well continue to climb further. There is no new supply coming to the market, and demand for gasoline-fueled cars (at the expense of diesel-fueled cars) continues to grow from emerging markets.

When people look to invest in precious metals, gold is usually what comes to mind. However, with the increasing industrial demand for the other precious metals, in addition to investment demand, it is clear that there may be more potential for profit with some of gold’s less shiny siblings. In this respect, palladium is well-positioned to surpass platinum and become the most sought-after precious metal after gold and silver.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

Rate this post:

Important for improving the service. Please add a comment in the comment field below explaining what you rated and why you gave it that rate. Failed Trade Recommendations should not be rated as that is considered a failure either way.
0 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 5 (0 votes, average: 0.00 out of 5)
You need to be a registered member to rate this.
Loading...

4.3 stars on average, based on 37 rated postsFredrik Vold is an entrepreneur, financial writer, and technical analysis enthusiast. He has been working and traveling in Asia for several years, and is currently based out of Beijing, China. He closely follows stocks, forex and cryptocurrencies, and is always looking for the next great alternative investment opportunity.




Feedback or Requests?

Click to comment

You must be logged in to post a comment Login

Leave a Reply

Analysis

Platinum Update: Faces Life or Death Showdown

Published

on

The Platinum/US Dollar (XPT/USD) pair has been in a decade-long downtrend. In July 2008, the pair broke out of a double top pattern on the weekly chart after taking out support of $1,850. There were numerous attempts to reverse the trend and break out of the slump. However, every single effort was denied as bears held $1,850 resistance. As a result, XPT/USD is now trading around $800.

While bears seem to have the upper hand, there’s a case for a bullish reversal. In this article, we explore the bearish and bullish scenarios for the XPT/USD pair.

The Bearish Case for Platinum

In technical analysis, the prevailing trend remains until there’s a clear sign of trend reversal. As mentioned, XPT/USD is still in a downtrend. The downtrend was recently confirmed by a breakout from sideways consolidation on the daily chart in June 2018.


XPT/USD daily chart

The breakout quickly brought XPT/USD down to $800 support. While bulls are managing to hold on, it appears that their mettle will be tested soon.

Large Descending Triangle on the Monthly

The descending triangle is often a continuation pattern with a bearish bias. The lower highs of this pattern put enormous pressure on the support that it eventually snaps. We see this pattern emerging on the monthly chart of Platinum/US Dollar.

XPT/USD monthly chart

The pattern is enormous. It is large enough to keep many retail investors on the sidelines. From the looks of it, XPT/USD appears to have just completed the E-wave or the final dead cat bounce. With a new lower high in place, bulls are in for the fight of their life at $800.

The Bullish Case for Platinum

The good news for the bulls is that not all descending triangles are bearish. Sometimes, bulls use the price compression at the apex to take out the resistance.

The key issue to understand is that the pattern must be triggered first. If bears take out $800, then the market sinks deeper. If bulls breach the resistance, then that might just be enough to kickstart a bull run.

Double Bottom on the Monthly

If bulls win this battle, then many investors will look at the possibility of a double bottom reversal pattern on the monthly chart.

Possible double bottom of XPT/USD

The preservation of $800 support amidst the threat of a huge descending triangle paints a bullish picture. It should send a reverberating message that $800 is bull territory. This would attract all types of investors and may generate sufficient momentum to push the market back up to previous highs and create a double bottom reversal pattern.

Bottom Line

Bulls and bears are bound to have a showdown at the $800 support level. Whoever wins this fight gets to control the market in the coming months or even years. Bears have the upper hand but it looks like bulls have what it takes to pull out one big surprise.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

Rate this post:

Important for improving the service. Please add a comment in the comment field below explaining what you rated and why you gave it that rate. Failed Trade Recommendations should not be rated as that is considered a failure either way.
1 vote, average: 5.00 out of 51 vote, average: 5.00 out of 51 vote, average: 5.00 out of 51 vote, average: 5.00 out of 51 vote, average: 5.00 out of 5 (1 votes, average: 5.00 out of 5)
You need to be a registered member to rate this.
Loading...

3.6 stars on average, based on 224 rated postsKiril is a financial professional with 4+ years of experience in financial writing, analysis and product ownership. He has passed all three CFA exams on first attempt and has a bachelor's degree with a specialty in finance. Kiril’s current focus is on cryptocurrencies and ETFs, as he does his own crypto research and is the subject matter expert at ETFdb.com. He also has his personal website, InvestorAcademy.org where he teaches people about the basics of investing. His ultimate goal is to help people with limited knowledge of finance and investments to create investment portfolios easily, and in line with their unique circumstances.




Feedback or Requests?

Continue Reading

Commodities

Gold Price Is Getting Crushed as Dollar Reaches New 2018 Highs

Published

on

Gold’s brisk selloff deepened Thursday, as investors put higher interest rates on the front burner following two days of testimony from Federal Reserve Chairman Jerome Powell.

Gold Price Levels

According to Bloomberg data, the price of gold bottomed at $1,212.70 a troy ounce on Thursday, extending a three-month selloff that has shaved 11% from the yellow metal’s value. Gold peaked slightly above $1,360 in March and April before plunging over the next three months.

Bullion is trading at its lowest level in over a year, with technical charts putting the next major support level around $1,200-$1,202 an ounce.

Silver, which often trades in the direction of gold, was off more than 2% Thursday to a low of $15.19 a troy ounce. The grey metal later recovered around $15.30 but was still down more than 12% from January’s settlement high of $17.61.

Dollar Rally Intensifies

A surging dollar has largely underpinned the massive exodus out of gold over the last three months. The U.S. dollar index (DXY), which tracks the performance of the greenback against a basket of currencies, has gained nearly 7% compared to three months ago. DXY is up 3.6% for the year, more than offsetting its worst annual start in decades.

On Thursday, the dollar index rose more than half a percent to a high of 95.65, its best level of the year.

The dollar’s strength combined with Brexit woes triggered a fresh slide in the British pound, which fell on Thursday to its lowest since August.

The Canadian dollar declined sharply on tariff fears, sending the USD/CAD currency pair to its highest level of the month.

A stronger U.S. currency makes the purchase of gold and other commodities more costly for international buyers, which reduces their relative demand. On Wall Street, investors have shown a renewed penchant for stocks in anticipation of a strong earnings quarter.

Fed Chairman Jerome Powell on Thursday wrapped up his semiannual testimony before Congress where he fielded questions on the economy, protectionism and cryptocurrency. Although Powell didn’t strike an overly hawkish tone, he left little doubt about the central bank’s plan to raise short-term interest rates.

On Wednesday, Powell told lawmakers they can expect several years of economic growth under the current policy regime.

“With appropriate monetary policy, the job market will remain strong and inflation will stay near 2% over the next several years,” Powell said in prepared remarks.

The central bank “believes that – for now – the best way forward is to keep gradually raising the federal funds rate” in a way that keeps pace with the economic recovery, he added.

Federal Open Market Committee (FOMC) members will next meet July 31-Aug. 1 to set short-term interest rates. No change is expected before September.

Featured image courtesy of Shutterstock. 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

Rate this post:

Important for improving the service. Please add a comment in the comment field below explaining what you rated and why you gave it that rate. Failed Trade Recommendations should not be rated as that is considered a failure either way.
0 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 5 (0 votes, average: 0.00 out of 5)
You need to be a registered member to rate this.
Loading...

4.6 stars on average, based on 554 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




Feedback or Requests?

Continue Reading

Commodities

Oil Prices Plunge as Saudi Arabia Prepares Record Output

Published

on

Oil prices declined sharply Monday amid reports that Saudi Arabia is heeding to President Trump’s request to keep the energy market well supplied. OPEC’s kingpin is stepping up its contractual obligations to key Asian markets amid disruptions from Venezuela and Libya, among others.

Oil Prices Drop

Crude futures in New York and London were down more than 4% on Monday. U.S. West Texas Intermediate (WTI) contracts for August settlement bottomed at $67.92 a barrel on the New York Mercantile Exchange, the lowest in nearly a month. Prices would later consolidate at $68.11 a barrel for a decline of $2.90, or 4.1%.

ICE Brent futures for September delivery bottomed at $71.80 a barrel, the lowest in three months. It was last down $3.16, or 4.1%, at $72.17 a barrel.

Saudi Arabia Ramping Up Production

Bloomberg reported Monday that the Saudis are planning to offer extra crude volumes to some of their Asian buyers less than a month after Riyadh convinced fellow OPEC members to crank up daily production levels.

Saudi Arabian Oil Co. has offered extra cargoes of its Arab Extra Light crude to at least two buyers in Asia, Bloomberg said. If approved, the additional supplies will be shipped for August.

Last month, the Organization of the Petroleum Exporting Countries agreed to raise production by 600,000 barrels per day, paving the way for an eventual 1 million-barrel-per-day increase for the cartel and its allies. The Saudis are planing to pump at record levels to offset supply disruptions elsewhere.

OPEC’s secondary sources indicate that the Saudis began ramping up production before the biannual meeting in Vienna on June 22, where cartel members agreed to ease supply restrictions. According to the data, Saudi Arabia boosted its daily output by 405,400 barrels in June compared with May.

Riyadh is also looking to pick up the slack from Iran, which faces renewed sanctions after U.S. President Donald Trump pulled out of the 2015 nuclear deal. The Saudis are said to be targeting crude output at 10.8 million barrels per day, the largest on record.

Trump Succeeding in Reining In Oil Prices

President Trump has criticized OPEC’s policies and has called on producers to raise their output in order to cap runaway price growth.

“Oil prices are too high, OPEC is at it again. Not good!” Trump tweeted in June. Earlier this month, he said: “The OPEC Monopoly must remember that gas prices are up & they are doing little to help. If anything, they are driving prices higher as the United States defends many of their members for very little $’s. This must be a two way street. REDUCE PRICING NOW!”

With political pressure to rein in oil prices intensifying ahead of the midterm elections, the Trump administration has announced it is considering tapping the nation’s emergency crude supply. The Strategic Petroleum Reserve currently houses a total inventory of 660 million crude barrels, though options under review suggest that figure is between 5 million barrels and 30 million barrels lower.

Featured image courtesy of Shutterstock. 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

Rate this post:

Important for improving the service. Please add a comment in the comment field below explaining what you rated and why you gave it that rate. Failed Trade Recommendations should not be rated as that is considered a failure either way.
0 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 50 votes, average: 0.00 out of 5 (0 votes, average: 0.00 out of 5)
You need to be a registered member to rate this.
Loading...

4.6 stars on average, based on 554 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




Feedback or Requests?

Continue Reading

5 of 15 Seats Available

Learn more here.

Recent Comments

Recent Posts

A part of CCN

Hacked.com is Neutral and Unbiased

Hacked.com and its team members have pledged to reject any form of advertisement or sponsorships from 3rd parties. We will always be neutral and we strive towards a fully unbiased view on all topics. Whenever an author has a conflicting interest, that should be clearly stated in the post itself with a disclaimer. If you suspect that one of our team members are biased, please notify me immediately at jonas.borchgrevink(at)hacked.com.

Trending