In 2017, palladium was the best performing metal, gaining by more than 40%. It rose mostly because of the demand from the automobile sector. Palladium is mostly used in diesel cars as a catalytic converter. In other words, it is used to reduce emissions from these cars. Therefore, as the global economy expanded, investors placed their bets on the metal in hopes that more demand would be spurred.
The price of palladium reached a high of $1140 in January this year. As the talks of a trade war emerged, the price of metal started to fall, ultimately reaching a low of $830 in August this year. A ray of hope emerged when the US made a deal with Mexico on NAFTA. This was important because of the number of cars Mexico manufactures for the American market. The US-Mexico deal coupled with the addition of Canada acted as an important catalyst for the metal. The price then accelerated and is currently at $1122, which is slightly below the YTD high of $1140.
The double EMA indicators show that the price of palladium may continue moving upwards. This is confirmed by the commodities channel index indicator and the accumulation/distribution as shown below. However, while the price may likely reach the YTD’s high, you should be cautious when it reaches that price. This is because it may change as investors take profits.
In 2017, palladium was the best performing metal, gaining by more than 40%. It rose mostly because of the demand from the automobile sector. Palladium is mostly used in diesel cars as a catalytic converter. In other words, it is used to reduce emissions from these cars. Therefore, as the global economy expanded, investors placed their bets on the metal in hopes that more demand would be spurred.
The price of palladium reached a high of $1140 in January this year. As the talks of a trade war emerged, the price of metal started to fall, ultimately reaching a low of $830 in August this year. A ray of hope emerged when the US made a deal with Mexico on NAFTA. This was important because of the number of cars Mexico manufactures for the American market. The US-Mexico deal coupled with the addition of Canada acted as an important catalyst for the metal. The price then accelerated and is currently at $1122, which is slightly below the YTD high of $1140.
The double EMA indicators show that the price of palladium may continue moving upwards. This is confirmed by the commodities channel index indicator and the accumulation/distribution as shown below. However, while the price may likely reach the YTD’s high, you should be cautious when it reaches that price. This is because it may change as investors take profits.
The post Need for Caution as Palladium Heads to $1140 appeared first on Forex.Info.
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