• Palladium vulnerable to correction if car sales soften

    UNITED STATES April 06 2017 10:31 AM

    NEW YORK (Scrap Register): Palladium has been strong lately despite disappointing US vehicle sales last month, but the metal could correct lower if car-sales figures do not pick up, said Commerzbank.

    Spot metal edged above $810 an ounce briefly Tuesday despite what the bank termed as weak U.S. March car sales. In doing so, it neared the two-year high it achieved a week and a half ago, Commerzbank added.

    “Wednesday morning, it is still trading above the $800 mark. Given that there were hardly any inflows into the palladium ETFs (exchange-traded funds), buying is likely to have been on the futures market,” analysts at Commerzbank added.

    It seems that speculative financial investors are particularly engaged here; they are likely to have further expanded their net-long positions in recent days after having previously increased them to their highest level in 2½ years.

    “In our opinion, this gives rise to correction potential if the weak car sales figures turn out not to be just a flash in the pan and if speculative financial investors choose to take profits,” Commerzbank added.

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