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Palladium Price Back Above Gold; Commerzbank Expects Correction

Kitco News

Palladium prices hit a record high yet again on optimism about automotive demand if there is peace in the U.S.-China trade war, yet the metal may be due for a pullback, says Commerzbank. The price of the palladium is also back above gold. “Nothing appears capable of halting the palladium price in its tracks,” the bank says. “After having already gained by 1.5% yesterday, it has climbed to a new record high of over $1,270 per troy ounce this morning. No doubt the price is still being driven by reports from China that the government will reduce import tariffs on U.S. cars from 40% to 15%. In addition, speculative financial investors are presumably jumping on the bandwagon and pushing the price ever higher.” Already, Commerzbank says, statistics compiled by the Commodity Futures Trading Commission through Dec. 4 show that the net-long position in palladium reached the highest level in over nine months. “In our view, this means that the price rise has no solid fundamental basis, so the current price level is not justified,” Commerzbank says. “We therefore expect the price to correct significantly in the next few months.” As of 8:12 a.m. EST, palladium was down $3.35 to $1,252.30 an ounce, while spot gold was down $1.90 to $1,242.50.

By Allen Sykora of Kitco News; asykora@kitco.com

 

TDS: Gold Needs Certainty From Fed To Accelerate Higher

Thursday December 14, 2018 08:28

While markets have been factoring in an expectation that the Federal Open Market Committee may become less aggressive hiking interest rates, more definite signs may be needed for gold to extend recent gains, says TD Securities. ”Considering that the Fed is casting a long shadow with its meeting next week, we expect that the FX [foreign-exchange] environment will remain benign for now,” TDS says. “That being said, risks of triggering significant shifts in CTA [Commodity Trading Adviser] flows have eroded in the near term, suggesting that precious metals could need to a catalyst for the time being. We think that the complex may need more certainty that the Fed will not move towards restrictive policy next year before prices move substantially higher.”

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