Palladium defied yesterday's negative comments from the Fed and remained stable unlike the other metals. Two Fed officials said that the central bank will probably need to raise interest rates above 5% before stopping and maintaining them at high levels to fight inflation. The dollar has strengthened, putting pressure on goods priced in U.S. currency.
After three years, mainland China opened sea and land routes to Hong Kong and cancelled the quarantine requirement for incoming travelers, removing the last restriction of the zero COVID policy. Travelers began streaming into mainland China by air, land and sea on Sunday, many of them eager for the long-awaited reunions as Beijing opened borders that had been nearly closed since the pandemic began.
It is expected that this season will see about 2 billion trips, nearly double last year's level, and travel levels will recover to 70% of 2019 levels, according to the government.
The growth of trips means increased demand for oil from China.
Recall that China is one of the largest buyers of palladium: the country accounts for almost a third of global consumption of platinum group metals. The opening of the economy triggers an increase in demand for this metal.
At the same time 40% of all palladium mined in the world is produced by Russia, another major supplier is the Republic of South Africa. Continued geopolitical tensions also give a bonus to the price of palladium.
According to the technical analysis, palladium is in a local rising trend. As it can be seen the volatility in the metal is compressed and a triangle pattern is formed. When leaving it, it is possible to look at more global growth or decrease targets. At the moment it could be tried to win back the movement inside the figure.
Now the quotations are at the lower boundary of this trend. The RSI indicator is a bit higher than the boundary value of 50 and indicates a possible continuation of the growth of the precious metal.
The resistance level of $1,818, which has been impregnable since the end of the last year, could be a growth target. A stop-loss will be set at $1,761 if the uptrend breaks down.
Rise in the price of palladium:
Take profit – 1 818
Stop-loss – 1 761
This content is for informational purposes only and is not intended to be investing advice.