Palladium Forecast: Unveiling the Stealth Bull Market

Palladium Forecast: Navigating the Silent Bull Market

Updated Sept 2023

We will discuss this concept against a historical background because history shapes the future. Those who don’t learn from it are doomed to repeat it. More importantly, we demonstrate what we actually did. We talk the talk and walk the walk.

Production:

– In 2022, global palladium production is estimated to be around 290 metric tons. Russia and South Africa continue to be the leading producers, accounting for over 50% of production. Russian production is expected to increase slightly to around 105 metric tons, while South African production is projected to remain at around 60 metric tons.

– Other key producers such as Canada, the US, and Zimbabwe are expected to maintain their production levels, with Canadian production remaining at around 50 metric tons.

– Looking ahead to 2023, global palladium production is expected to reach approximately 300 metric tons. Russian production is anticipated to rise to around 110 metric tons, while South African production is forecasted to stay at around 60 metric tons.

Investment demand:

In 2023, the forecast for palladium Investment demand is poised to surge by an additional 25,000 troy ounces as the supply and demand for palladium approaches equilibrium. Demand is projected to reach around 55 metric tons, with a significant contribution from ETFs.

– The Aberdeen Standard Physical Palladium Shares ETF (PALL) is expected to maintain its position as the largest palladium ETF, holding over 2.5 million ounces (over 75 metric tons) of palladium in its trust.

– Coin and small bar demand is also expected to remain robust in 2022, with an estimated demand of over 5 metric tons.

Looking forward, the demand for palladium is expected to continue growing, driven by various factors. The increasing adoption of stricter emissions standards for automobiles, particularly in major markets like China and Europe, is expected to drive the demand for palladium in catalytic converters. Additionally, the growth in the production of electronic devices, particularly smartphones and tablets, which utilize palladium in their manufacturing processes, is expected to contribute to the overall demand for the metal.

Furthermore, palladium’s unique properties, such as its high corrosion resistance and catalytic activity, make it an attractive choice for various industrial applications beyond automotive and electronics, including chemical processing, jewelry production, and water treatment. These factors, combined with the limited supply of palladium, as it is primarily produced as a byproduct of platinum and nickel mining, are likely to contribute to the sustained demand and potentially drive prices higher in the future.

Overall, while there may be fluctuations in demand and production in the coming years, the long-term outlook for palladium appears positive, with increasing demand from multiple sectors and limited supply supporting its value.

Palladium: Supply Challenges and Price Volatility

The constrained availability of palladium can be primarily attributed to its byproduct nature in platinum and nickel mining. Typically co-located with these metals, palladium extraction proves to be a more complex and expensive process compared to other elements.

Furthermore, the concentration of palladium production in specific geographic regions exacerbates the supply issues. Russia and South Africa, the world’s largest producers, historically dominate the palladium market. Nonetheless, it’s crucial to recognize that supply dynamics can shift, and fresh palladium sources may emerge in different areas.

The scarcity of palladium, together with its increasing demand across various sectors, has been a key driver of price volatility in recent years. Notably, the automotive industry’s need for palladium in catalytic converters, especially in the wake of stringent emissions regulations in China, Europe, and other regions, has led to the demand surge.

This heightened demand, coupled with supply interruptions and production complexities, triggered remarkable price spikes in palladium. In 2020, palladium prices soared to unprecedented levels, surpassing even gold, owing to the combination of surging demand and restricted supply.

This price unpredictability and the rarity of palladium have made it an appealing investment option for certain investors, further intensifying price levels. However, it’s crucial to acknowledge that commodity prices are susceptible to market fluctuations, and investing in palladium or any precious metal carries inherent risks.

Exploration and mining enterprises continue to allocate resources towards discovering fresh palladium reserves, and technological advancements may also influence palladium demand in the future. Ongoing research into alternative materials and technologies for catalytic converters could potentially reduce reliance on palladium.

Nevertheless, given the existing limitations on palladium supply and its pivotal role in various industries, it appears that palladium will continue to confront price pressures in the near future. Monitoring market conditions and supply dynamics is essential for assessing the long-term prospects of palladium.

Palladium Outlook 2023-2024: Demand, Supply, and Market Dynamics

For palladium demand and supply in 2023:

– Demand is estimated to be around 7.7 million ounces, slightly lower than 2022. Automotive demand is expected to improve as supply chain issues are resolved, but ongoing electric vehicle adoption and economic risks could limit growth.

– Supply is projected to rebound as mines affected by weather issues in 2022 return to normal output. Primary supply is expected to increase.

Analysts expect the palladium market will be in a deficit of around 200,000 ounces in 2023.

For 2024:

– Demand is forecasted to continue growing but at a slower pace. Some analysts predict a shift to electric vehicles could impact palladium demand from the automotive industry in the long term.

– Supply is projected to increase further as mine production continues to recover from 2022 disruptions.

Several analysts expect the palladium market will shift into a surplus of 300,000-2.3 million ounces in 2024 as supply outpaces demand growth. This would weigh on prices.

However, it’s important to note that forecasts further out come with more uncertainty depending on how the economy and the automotive/energy transition evolves. Mines would aim to meet demand, but disruptions are always possible.

Please keep in mind that the above information is based on the latest available data and projections, but it’s always recommended to refer to the most up-to-date sources and market analysis for the most accurate and current information on palladium demand and supply.

Now, let’s examine the historical context of the palladium market. The current trend bears a striking resemblance to the situation in 2008, and there’s a potential for a repeat scenario, albeit on a larger scale, compared to what occurred previously. This is particularly concerning given Russia’s status as one of the leading producers of this metal, and its strained relations with the United States.

Palladium Forecast: Examining the Technical Landscape.

Palladium took a severe hit in 2008, swiftly erasing all its previous gains within a matter of months. However, this adversity ultimately transformed into an exceptional buying opportunity, one we wholeheartedly endorsed from late 2008 through early 2009. In fact, we were so convinced of its value that we categorized it as a “screaming buy,” a term we reserve for exceptionally undervalued investments with remarkable potential. Over a span of roughly 15 months, Palladium made a remarkable recovery, surging by well over 120%, an astonishing rate of return, to say the least.

It easily breached the initial resistance point at 375 and is now striving to overcome an even more formidable zone of resistance. The $465-$475 range constitutes a region of substantial opposition. It’s likely that several attempts will be necessary for Palladium to break through this zone. However, once achieved, the path should become considerably smoother, leading to the 550-600 range.

Palladium’s Pivotal Point: Breaking Barriers and Charting a Bullish Future

Palladium finds itself at a crucial crossroads, having recently broken free from a long-term downtrend line and endeavouring to escape the constraints of a 10-year channel formation. The next significant milestone for Palladium involves sustaining trade within the 465-475 range for a continuous 12-day period. Achieving this would lay the foundation for a potential rally that could propel it toward the 800-890 range. In terms of timing, once Palladium manages to maintain this range for the suggested period, these targets could materialize within 12 to 18 months.

However, the true bull market for Palladium will only commence when it surges past the 1100 mark. From a longer-term perspective, securing a monthly close above 1100 and the ability to trade above this level for a continuous 15-day stretch could pave the way for a test of the 1500-1700 ranges.

Palladium Forecast: Resilient Outlook and Investment Wisdom

Our proprietary timing indicators are sending positive signals for Palladium across daily, weekly, and monthly timelines, painting a promising long-term outlook for this precious metal. What sets Palladium apart is its unique performance – it’s the sole precious metal to achieve a new 52-week high, even in the face of a strengthening dollar. Furthermore, it maintained its strength during the dollar’s ascent, notably refraining from issuing a weekly sell signal, and any temporary daily sell signals have long been neutralized.

When considering the long-term and very long-term prospects for Palladium, the future appears exceptionally bright. However, in the short to intermediate term, Palladium may experience some profit-taking, given its remarkable rally over the past 15 months. For prudent investors, this presents an opportunity to leverage strong pullbacks by either increasing existing positions or initiating new ones in this metal. Down the road, you’ll likely look back and consider the current price a bargain. Don’t miss this opportunity – secure at least a small position now and use pullbacks to augment it.

While acquiring PALL might be one approach to gain exposure to Palladium, our preferred method is investing in Palladium bullion. We recommend Larry Laborde as our trusted bullion dealer. Our subscribers have relied on his exceptional service and knowledge for years. You can reach out to him at www.silvertrading.net.

One who has imagination without learning has wings without feet.
Joseph Joubert, 1754-1824, French Moralist