The positive sentiment in precious metals markets didn't affect the palladium prices over the past weeks. Yesterday, the price attempted to rise amid slowing inflation in the U.S. The figures boosted investors' hopes of a pause in the rate hike cycle. Today, the price movement has been reversed.
The U.S. consumer price index (CPI) rose by 0.1% in March after growing by 0.4% in February. The projected increase, according to a Reuters poll, was expected to be at the rate of 0.2%. Over the 12 months, starting from March, the core CPI rose by 5.6% after rising by 5.5% in February.
Northam Platinum retracted its offer to buy Royal Bafokeng Platinum, explaining this by low prices for platinum-group metals. This came after the end of a year-long merger conflict with a larger competitor, Impala Platinum.
Northam's decision to give up its pursuit of RBPlat gives Impala (the world's second-largest platinum-group metals producer) new opportunities to strengthen its hold on a mining company with high-quality assets, making it more attractive for the merger.
The rejection of the deal signals that the company is unsure of the outlook for palladium prices. They are currently at their 4-years low. The downtrend in the precious metal will last for a certain period of time before a new growth cycle begins.
According to the technical analysis, the palladium volatility is getting weaker and prices are forming a pennant. The upper boundary of the pattern is more credible, as it has been formed for a longer period of time. The lower boundary has been formed only during the last several weeks, that is why it is less robust and the probability of its breakout is estimated to be higher. The price is now at the upper boundary, but a pullback is likely to happen.
The downside target will be at the level of $1412. A stop loss is placed at the breakout of the upper boundary of the pattern, which is the level of $1477.
Decrease in the price of palladium:
Take profit — 1412
Stop-loss — 1477
This content is for informational purposes only and is not intended to be investing advice.