Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
AI Tech Stocks State Going into the CRASH and Capitalising on the Metaverse - 25th Jan 22
Stock Market Relief Rally, Maybe? - 25th Jan 22
Why Gold’s Latest Rally Is Nothing to Get Excited About - 25th Jan 22
Gold Slides and Rebounds in 2022 - 25th Jan 22
Gold; a stellar picture - 25th Jan 22
CATHY WOOD ARK GARBAGE ARK Funds Heading for 90% STOCK CRASH! - 22nd Jan 22
Gold Is the Belle of the Ball. Will Its Dance Turn Bearish? - 22nd Jan 22
Best Neighborhoods to Buy Real Estate in San Diego - 22nd Jan 22
Stock Market January PANIC AI Tech Stocks Buying Opp - Trend Forecast 2022 - 21st Jan 21
How to Get Rich in the MetaVerse - 20th Jan 21
Should you Buy Payment Disruptor Stocks in 2022? - 20th Jan 21
2022 the Year of Smart devices, Electric Vehicles, and AI Startups - 20th Jan 21
Oil Markets More Animated by Geopolitics, Supply, and Demand - 20th Jan 21
WARNING - AI STOCK MARKET CRASH / BEAR SWITCH TRIGGERED! - 19th Jan 22
Fake It Till You Make It: Will Silver’s Motto Work on Gold? - 19th Jan 22
Crude Oil Smashing Stocks - 19th Jan 22
US Stagflation: The Global Risk of 2022 - 19th Jan 22
Stock Market Trend Forecast Early 2022 - Tech Growth Value Stocks Rotation - 18th Jan 22
Stock Market Sentiment Speaks: Are We Setting Up For A 'Mini-Crash'? - 18th Jan 22
Mobile Sports Betting is on a rise: Here’s why - 18th Jan 22
Exponential AI Stocks Mega-trend - 17th Jan 22
THE NEXT BITCOIN - 17th Jan 22
Gold Price Predictions for 2022 - 17th Jan 22
How Do Debt Relief Services Work To Reduce The Amount You Owe? - 17th Jan 22
RIVIAN IPO Illustrates We are in the Mother of all Stock Market Bubbles - 16th Jan 22
All Market Eyes on Copper - 16th Jan 22
The US Dollar Had a Slip-Up, but Gold Turned a Blind Eye to It - 16th Jan 22
A Stock Market Top for the Ages - 16th Jan 22
FREETRADE - Stock Investing Platform, the Good, Bad and Ugly Review, Free Shares, Cancelled Orders - 15th Jan 22
WD 14tb My Book External Drive Unboxing, Testing and Benchmark Performance Amazon Buy Review - 15th Jan 22
Toyland Ferris Wheel Birthday Fun at Gulliver's Rother Valley UK Theme Park 2022 - 15th Jan 22
What You Should Know About a TailoredPay High Risk Merchant Account - 15th Jan 22
Best Metaverse Tech Stocks Investing for 2022 and Beyond - 14th Jan 22
Gold Price Lagging Inflation - 14th Jan 22
Get Your Startup Idea Up And Running With These 7 Tips - 14th Jan 22
What Happens When Your Flight Gets Cancelled in the UK? - 14th Jan 22

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold and Silver Investors, Don't Miss Out on the Palladium Stealth Bull Market

Commodities / Palladium Aug 25, 2011 - 06:52 AM GMT

By: Money_Morning

Commodities

Best Financial Markets Analysis ArticlePeter Krauth writes: Even while gold, silver, and platinum steal most of the headlines, there are stealth bull markets advancing in other precious metals.

Take palladium for instance.


Indeed, while platinum may have the prestige, palladium has the profits.

Palladium has seriously outperformed its sister metal over the past year: Its price has soared 57%, compared to a mere 23% increase in platinum prices.

Platinum is still trading 24% below its 10-year high, which was set at $2,273 an ounce in early 2008. But palladium just this past February established its own 10-year peak at $858 an ounce - and at about $743 per ounce now, it's just 15% shy of that mark. And that's despite the massive sell-off we've seen in precious metals over the past few days.

Furthermore, the outlook for palladium - from both fundamental and technical aspects - is decidedly positive. All that's left is for palladium to take out the $858 an ounce target it set earlier this year. Once that happens we could be looking at a blue-sky breakout for the unsung metal.

So let's take a closer look.

Fundamental Factors
Emerging market demand, a weak dollar, and a relative dearth of safe-haven investments have been a boon for commodities prices across the board. But palladium, unlike other precious metals, has the added bonus of industrial demand.

Some 63% of palladium is used in automobile catalysts, while only 6% makes its way into jewelry.

According to Scotiabank's recent Global Auto Report, car sales in the world's largest emerging markets - China, India, Brazil and Russia - are on pace to set new records this year. Even U.S. and Canadian sales are advancing at a healthy clip.

Remember, Fatih Birol, chief economist for the International Energy Agency (IEA), says that 700 out of every 1,000 people in the United States and 500 out of every 1,000 in Europe own cars today. But in China, only 30 out of 1,000 own cars. And Birol thinks that figure could jump to 240 out of every 1,000 by 2035.

That's a clear benefit to palladium demand.

In fact, this increasing demand has already led to a sharp decrease in palladium supplies.

Over the last five years, palladium was in net supply of nearly 1 million ounces, according to SFA Oxford, a consultancy that specializes in the platinum group of metals (PGM). But just last year that sharply reversed, with a net shortage of 210,000 ounces.

For now, shortages are filled through recycling and stockpiles of the metal.

Yet as SFA Oxford's projections show, except for this year, a deepening shortage of palladium is on tap as far as the next decade.

Part of the problem lies in South Africa. South Africa is responsible for 57% of the world's PGM production, but many of the country's miners are on strike following the government's decision to nationalize the mining sector.

The South African government's mining charter calls for 26% of the mining industry in Africa's largest economy to be transferred to African owners by 2014 as part an empowerment drive to rectify the disparities of white apartheid rule.

Africans owned just 8.9% of South Africa's mines in 2009, below a target of 15%.

Even if the targets are never met, just the ongoing threat is enough to frighten off potential investments in both new and existing projects, leading to lower total output.

The world's second-biggest PGM producer is Russia. That nation, too, is a wildcard. It's widely regarded as having huge stockpiles of these precious metals, but no one knows with any certainty how much of a cache remains. Some estimate that, after decades of drawdowns, what's left of the Russian stockpile will only satisfy the palladium production deficit until the end of 2012.

Technically Speaking
On a technical basis, palladium is showing signs of consistent strength as well.

If you want to see just how well palladium has performed compared to platinum, just look at the performance of the two corresponding exchange-traded funds (ETFs). The Physical Palladium Shares ETF (NYSE: PALL) is up about 53% in the past year, while the Physical Platinum Shares ETF (NYSE: PPLT) is up just about 20%

As part of the same metal family, platinum and palladium are to some extent interchangeable in certain applications. So it's interesting to watch how their price ratio behaves.

With platinum's bull-run high only 15% away from where it's currently trading, the metal's price could easily hit that $858 an ounce target and keep soaring from there.

The simplest way to profit is through the Palladium Shares ETF (NYSE: PALL), which trades in reasonable volumes with an expense ratio under 1%.

I recommend you keep palladium on your precious metals watch list.

Source :http://moneymorning.com/2011/08/25/gold-and-silver-arent-the-only-precious-metals-making-a-killing/

Money Morning/The Money Map Report

©2011 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or 72 hours after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in