It has been a few months since we have seen the dollar index below the 98 level. With the Ten-Year Treasury yields now below 2.3 percent, both markets giving Gold and Silver a boost this morning.
As I started this report this morning we have seen equities down triple digits. It seems that as the equity markets head south, more investors are seen taking profits off the table and heading for the bond market and precious metals. Looks like the President’s agenda is on life support, with many looking for a way to pull the plug once and for all.
Some guests on CNBC were saying this morning that as time goes by, the chances of the President doing something that would get him impeached will increase dramatically. They went on to say that Pence and the Republicans will really give the Equity markets a boost. In my opinion, it doesn’t matter whether you support the President or not this kind of rhetoric only divides the country further.
Today I was asked to give a little information on how well the Palladium market has done in 2017, but before I talk about the price movement let’s talk about the primary uses for physical palladium.
The largest use of palladium is in catalytic convertors for automobiles.
Palladium is also used in dentistry, watch making, electrical contacts and
surgical instruments. It can also be found in laptop computers and mobile phones.
Palladium is rarer than gold or platinum and is one of the six elements in the so-called Platinum Group Metals (PGM’s). The other products are Platinum, Rhodium, Ruthenium, Osmium and Iridium.
At the beginning of 2017, we saw palladium trading around the $705 area. So far this year, investors have realized a gain in the price on the highs, most recently of approximately 15 percent. Who says the Equities are the only market giving double digit returns?
This year Palladium hit an intraday high of $830.35. The last time we seen these levels for Palladium was back in September of 2014. Open interest on NYMEX has been increasing and institutional investor interest increased in the month of April.
According to the charts, the level of resistance for the long term investors is at the $ 819- 820 level in spot. That area has been challenged this year a few times this year with no follow thru on any London fixing price. Currently the spot price of Palladium is trading at $786.00.
Palladium ETF movement has been flat of late, sitting at 1,526.000 ounces, and the CME group is reporting approximately 12 thousand ounces registered and 30 thousand ounces eligible in approved depositories.
I believe any increases in the price of palladium will be attributed to how the economy fares in the future. It’s no wonder the palladium market has done so well this year with all the promises of this administration for stronger growth. In the end, if the economy continues to grow as some members of the Federal Reserve predict, the price of palladium could
be the diamond in the ruff for investors.
But the question remains, is this country headed in the right direction?
Have a wonderful Wednesday.
Disclaimer: This editorial has been prepared by Walter Pehowich of Dillon Gage Metals. This document is for information and thought-provoking purposes only and does not purport to predict or forecast actual results. It is not, and should not be regarded as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein are current opinions as of the date appearing in this editorial only and are subject to change without notice and cannot be attributable to Dillon Gage. Reasonable people may disagree about the opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. All investments entail risks. There is no guarantee that investment strategies will achieve the desired results under all market conditions and each investor should evaluate its ability to invest for a long term especially during periods of a market downturn. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. This information is provided with the understanding that with respect to the opinions provided herein, that you will make your own independent decision with respect to any course of action in connection herewith and as to whether such course of action is appropriate or proper based on your own judgment, and that you are capable of understanding and assessing the merits of a course of action. You may not rely on the statements contained herein. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisors with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.