Not much has been talked about palladium recently, but weak supply growth and strong demand from auto-producing countries has ignited a powerful breakout in this white metal:
The breakout above $820 from a 6-month base initially targets $860 followed by the August 2014 high of $913.
The supply shortfall for palladium during 2015 is projected to be 1.6 million ounces and instability in Russia, the world’s largest palladium producer, could serve to exacerbate the large supply deficit. Any disruption of Russian supply to the market could easily cause palladium prices to quickly soar above $1,000/oz.
US based platinum group metals producer Stillwater Mining (SWC) is one of the more accessible ways that investors can benefit from a further rise in palladium:
SWC put in a double-bottom near $13 in January and has since stair-stepped higher. A decisive move above $15.25 could see price quickly target $18+.
Remember a few months ago when Russia’s wealthiest man (aside from Putin…) Vladimir Potanin was working a deal to buy $2 billion worth of palladium from Russia’s central bank? There hasn’t been much reported about this deal since last September but it would not be surprising to find out that Russia’s largest mining company led by one of Putin’s oligarch cronies was able to secure a massive supply of physical palladium from the central bank just before a global supply crunch.