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.