Head of Commodity Strategy, Saxo Bank Group
Summary: Palladium is under renewed pressure as weak auto sales and the US-China trade dispute remove focus from tight supply. Key support at $1,316/oz stands in the way of potential further weakness towards $1,225.
My take is that the market is likely to remain tight but that headline risks have triggered a reality check among speculative investors. Fundamentals remain supportive but given the distance it travelled earlier in the year, a correction – while still being in an uptrend – can take palladium down to $1,225/oz or even $1,132/oz.
Holding onto support at $1,316/oz, however, will send a signal that the latest setback was nothing more than a weak correction within a strong uptrend.