Palladium has been in a downtrend since the end of last year. Over the recent couple of weeks, the metal made an attempt to break out of this trend. Although there was certain growth against the background of the banking crisis in the U.S., now the prices are going back down to their previous levels.
In contrast with the gold price dynamics, the movement of palladium prices is difficult to explain from the fundamental point of view. From the technical point of view, it means that the seller of the metal simply doesn't allow the precious metal to grow, even on the background of concerns over the banking sector.
Moody's credit rating agency has provided the world's central banks with a number of recommendations. Particular attention was paid to the U.S. Federal Reserve (Fed).
Despite maintaining inflation management as a priority, the Fed may temporarily halt the tightening cycle if the banking crisis gets any worse. For now, the central bank is expected to raise interest rates by 25 basis points at its next meeting on March 22.
Higher interest rates have a negative impact on precious metals markets. At the same time, a pause in the cycle of monetary tightening or easing of monetary policy is usually beneficial for precious metals.
It is also worth noting that gold is the main beneficiary of potential monetary policy easing among metals. Gold has historically been a safe haven for investors, protecting them from asset depreciation. Palladium doesn’t play the main role in this regard and will only rise indirectly because of this growth driver.
There's now a greater uncertainty in the world market. On the one hand, it's necessary to deal with persistently high inflation, while on the other hand, it's necessary to keep the economy stable. So now it's easier to be guided by the technical signals and look at the trends forming in the market.
Palladium is back inside its downtrend, which is becoming a medium-term trend for the metal. Now the scenario of the price going to its lows is possible, from which the further direction of the price movement will be determined. The downside target will be the level of 1350 dollars. A stop-loss can be placed at a second break of the downtrend, and there will also be a breakthrough above the current basing formation. This is the level of 1470 dollars.
A decline in the price of palladium:
Take profit — 1350
Stop-loss — 1470
This content is for informational purposes only and is not intended to be investing advice.
