Volatility in prices for palladium is getting smaller, the metal is ignoring the rally in gold and silver. The transition of quotes to the flat dynamics after a long decline is a positive factor.
There is almost no news around the metal, the dynamics of quotes are influenced by technical factors, as well as the prospects of monetary policy in major economies of the world. Palladium has significantly behind the other precious metals, the transition to the flatter range of quotations may signal a change in sentiment. In general, the forecasts for this group of metals remain bullish.
The head of commodity strategy at Saxo Bank Ole Hansen gave his forecast about the precious metals market. The bank forecasts continued growth in gold and silver.
In the next few months, gold is likely to reach a historical high around $2100 per ounce. In that case, silver would follow the yellow metal and rise to $26 per ounce. However, due to concerns about global economic growth, the bank's target level of $30 will not be reached.
On Friday, nonfarm payrolls and U.S. unemployment statistics will be published. After negative jobs data in the U.S., weak labor market data is expected. This means that investors will be more active in their forecasts for the reduction of the key rate in the nearest future. This situation will stimulate additional demand for precious metals.
U.S. Federal Reserve representative Philip Jefferson said that the central bank is still studying the impact of the current rate hike on inflation and the economy. The reversal of the labor market may finally convince the regulator on the need to ease monetary policy.
According to the technical analysis, palladium is forming a pennant pattern and is now at the lower boundary of the range. Within the pattern the exit to the upper boundary should be expected.
The level of $1,480 will be the upside target. Stop-loss can be set on the way down from the pattern and below the important support levels, which corresponds to $1383.
Rise in the price of palladium:
Take profit – 1480
Stop-loss – 1383
This content is for informational purposes only and is not intended to be investing advice.
