My Precious

My Precious

August 23, 2017 Off By Chuck

Palladium, Pd46, is a rare and luxurious silvery white metal. Without wanting to start the next world war by bringing up this topic (I will leave starting WWIII to Washington, DC), there are some that view palladium as a precious metal right along with gold, silver and platinum.  While palladium was never historically used as coinage (and therefore the argument as to why it is not a “precious” metal), it, like the 3 other precious generals, has been assigned an ISO 4217 currency code. So, that’s precious enough for me.

In the combination 9-year chart above, the price of palladium is represented by the candlestick bars while gold, silver and platinum are the colored (and labeled) lines. As you can see palladium is breaking out to chart highs while gold, silver and platinum are mired in investment purgatory. Interestingly, palladium has been priced higher only once before occurring in 2001 when traders went into a speculative frenzy pushing its price to almost $1100/oz, about $150 from where it closed today.

I wish I knew why the divergence was occurring. Some will say it’s because palladium is an industrial metal and should be increasing as the economy grows. The good thing is in technical analysis we don’t worry about the “why’s” but rather focus solely on price.  With new highs on the radar (it has not been confirmed yet because this is a monthly chart and August is not over), once confirmed signals higher prices ahead with the next target being the 2001 highs.