Palladium
President Obama plans tighter rules on vehicle emissions. This can only be good news for Palladium. Can’t it?
The palladium price has strengthened during early 2009 despite the doom and gloom surrounding the automotive market. With investors having priced in at least some of this negative news already, Palladium Exchange Traded Fund positions grew throughout much of the month. However, the price remained almost range-bound between strong support close to $180 and firm resistance around the $200 mark.
Palladium started 2009 at $185, marginally higher than it had ended the previous year. A weak US Dollar and some investor interest has recently forced the price higher. This was despite Toyota’s news that it would shut all of its Japanese vehicle plants for 11 days in response to low vehicle demand. Palladium, however, briefly ignored the general negativity in the market on the following day. With the $200 barrier now firmly in sight, investors started to push palladium higher. Recent news has emerged that Mazda planned to fit a low-loaded pgm catalyst on one of its vehicles (the Mazda 3). However, the market was unmoved and investors instead tried to push the price over $200 as the US dollar weakened briefly in response to high unemployment data.
Palladium has now remained range bound between $180 and $200 for the last couple of weeks with little buying or selling evident. However, some purchasing was seen through the ETFs in Europe and this slowly applied upwards pressure to the price. Recent news has emerged that President Obama was planning to allow individual US states to adopt tighter vehicle emissions standards than the federal rules. This injected a little energy into the palladium market and the price climbed out of its range to $193 that morning in London. However, the excitement quickly dissipated and palladium now remained becalmed close to the $190 level.
