Palladium price has been rallying for about two weeks now amid the ongoing geopolitical tensions in Eastern Europe.
Geopolitics
Russia is the leading producer of palladium in the world; accounting for about 40% of the mined metal. As such, the ongoing tensions with Ukraine have traders concerns over the probable tightening of the metal’s supplies. The EU and US is considering sanctions on the country’s leading banks in the event of an invasion. Executing the sanctions may hinder the conversion of rubles to US dollars; an aspect that would impact palladium exports.
According to US General Mark Milley, a Russian invasion in Ukraine would be “horrific”. During a news conference at the Pentagon, General Milley indicated that the Russian troops near Ukraine’s border is the hugest since the Cold War.
On the one hand, Russia has insisted that it does not plan to invade Ukraine. However, Ukraine has urged Russia to pull back its troops and engage in dialogue.
The recent rallying in Palladium price is a turn around of its fortunes in 2021 when chip shortage impacted car production and the subsequent demand for catalytic converters. Indeed, it was one of the worst performing commodities in 2021, having dropped by close to 50% from its all-time high of $3,022.76 in May.
Palladium price technical outlook
Palladium appears set to record the third week of gains. Notably, the precious metal has been in the green for 10 consecutive sessions; rallying by close to 30% during that timeframe. It has been holding steady above the psychologically crucial level of $2,000, having dropped past that level about two months ago.
As at 10:25 a.m UTC, it was at 2,413.46. This is its highest
