Palladium continues its slow decline. Last week, we made a bullish palladium forecast which didn’t fully come true. We forecasted the metal to grow due to higher demand in China and upward trends in prices of other precious metals. However, the palladium price is ignoring the opening in China. The metal has also ignored China's higher-than-expected GDP growth. The country's GDP for 2022 showed growth by 2.9%, which is lower than the Chinese government's global target of 5.5%, but higher than economists' forecasts of 1.8%.
There is positive news for palladium again today.
Goldman Sachs Group Inc. raised its forecast for China's gross domestic product growth this year after the government’s release of stronger-than-expected economic data. A recovery of the economic growth trajectory is accelerating. The bank's economists now expect the economy to grow by 5.5% this year, while their previous forecast was 5.2%, according to a note published on Tuesday evening.
A release of updated information on inflation in the E.U. is due today, as well as a publication of a new reading of the U.S. producer price index. Investors' expectations are naturally optimistic, as inflation is suggested to slow down.
The UK inflation data has also been released today, and inflation indicators showed some decrease and met analysts' expectations. The gold price immediately showed solid growth, winning back the decline demonstrated at the beginning of the day, and palladium also started increasing. This market reaction seems to be excessive, as inflation didn't show a decline more notable than it was initially expected. Nevertheless, let’s be guided by the facts. In that case, strong EU inflation data may increase the momentum of precious metals, including palladium.
According to the tech analysis, palladium didn’t manage to break it downward trend that has been lasting since October 2022. Due to positive inflation data, palladium might make a new attempt to break the trend and start moving sideways. In this case, the first growth target will be the upper limit of the potential sideways movement at the level of $1,808. Stop-loss is then set near the recent minimum at $1,702.
An increase in the palladium price:
Take profit – 1,808
Stop-loss – 1,702