Could Palladium be 2017’s Top-Performing Commodity?

Cassie Bastien

6/20/2017 10:46:25 AM

Daily Gold & Silver Market Report – 06/20/2017

Chip Chipman with Bloomberg News says in regards to main commodities, Palladium is out-performing them all so far this year. To further explain, Chipman says, “The metal is up 32 percent, beating 33 other raw materials, including lean hogs and aluminum, tracked by Bloomberg.” But what is causing this seemingly random rally within the lower-cost metal? Well, it is simple supply and demand. Palladium, which Chipman explains “is mainly used to curb harmful emissions from gasoline vehicles, has rallied on expectations that supply will lag demand for a sixth straight year.” Brad Yates, head of trading for U.S. Gold refiner Elemetal, said “It appears that there is a serious shortage of readily available physical bars for spot settlement.” Because Palladium, similar to Platinum, can be used interchangeably, some investors aren’t completely disregarding the metal just yet.

Silver Prices Continue Decline

Financial Market Analyst Sam Bourgi with EconomicCalendar.com says Silver prices have “declined nearly 7 percent over the past two weeks as volatility dragged prices from nearly two-month highs.” It was the U.S. dollar that gained nearly 0.4 percent Monday, pressuring commodity prices. However, the pound, euro and yen all fell on day one of Brexit talks between the United Kingdom and Europe. Bourgi says those negotiations are expected to drag on for at least two years, providing another source of uncertainty for investors.

Struggle in Dow, S&P 500

Pressured by falling energy shares following a sharp drop in oil prices, market reporters Sara Sjolin and Anora Mahmudova said U.S. stock-market indexes pulled back slightly Tuesday. The MarketWatch reporters explained, “The S&P 500 was off by 6 points, or 0.2 percent, with eight of the 11 main sectors trading lower. The energy sector was down more than 1 percent, leading the losers.” Due to lack of fundamental news until the next earning season, some analysts expect a sideways move over the next few weeks. Peter Cardillo, chief market economist at First Standard Financial, wrote, “We suspect that more winding and grinding ahead of second-quarter earnings season in a few weeks will keep the flame of the positive trend from faltering.” Sjolin and Mahmudova also mentioned there are fears that higher Federal Reserve interest rates could trigger a market move into more defensive stock sectors. Boston Fed President Eric Rosengren said low interest rates do pose stability concerns that central bankers and the private sector must take seriously. Also, House Speaker Paul Ryan's comments Tuesday on tax reform are expected to be in the limelight.

At 11:46 a.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,245.40 Down $2.50
• Silver, $16.53 Down $0.10
• Platinum, $925.90 Down $4.00
• Palladium, $873.00 Up $7.40

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