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The Palladium capitulation continues

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(Kitco News) - Today palladium is down another 2% and that means the price has fallen just over 30% in a 19-day period. On the technical front, the price has made a new lower high and lower low after the previous wave low at $2,276/oz broke to the downside. The main area of support that some analysts were interested in was the orange support zone. It provided no respite for the capitulation.

Moving forward, the next technical support area is at the $1,800/oz area. This would mean the $2,000 psychological zone would need to be taken out first and at the moment, the price is only $43 away.

The World Platinum Investment Council said that it expects higher palladium costs, used in vehicle pollution-control devices, to spur a gradual switch by automakers to using more platinum in gasoline-powered cars and trucks. Both metals have been hurt by expectations that auto output will remain constrained by a shortage of semiconductors.

ED&F Man Capital Markets analyst Ed Meir noted, "Both complexes (especially palladium) have gotten hammered this week as we have to suspect that difficulties in the global auto sector must be weighing on PGM demand,"

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