When industrial demand overwhelms supply, the potential for extreme price moves increases…
Palladium has hit another record high today:
While gold and silver were in the news over recent months for their rally over the summer, one of the lesser-known precious metals has recently been skyrocketing.
Palladium’s price has soared over the last year, going from slightly under $900 in August of 2018 to just under $1,800 per ounce in October of 2019. Which has created an interesting market dynamic, in that the palladium market was already in a structural shortage. Which is now being further exacerbated by the fundamental problems in the broader economy.
Because as the Federal Reserve continues to intervene in the markets and create more digital credit, investors are increasingly turning towards the precious metals. Which is not to say that there’s a large segment of the market that’s flooded towards palladium in response to Federal Reserve policy, but at the same time the factors are not completely unrelated. As the appeal to anything that can’t be printed grows with each additional Fed dollar.
Of course what’s really interesting about the situation is that when industry demand overwhelms the supply of a commodity, the potential for extreme price moves increases. And should the fractional reserve leverage in the palladium market be exposed, would that draw attention to similar supply and demand dynamics that exist with silver and platinum?
It’s a market that few follow, yet that could hold some real clues for what happens to the rest of the precious metals spectrum. And fortunately palladium expert David Jensen was kind enough to join me on the show to break down the situation and explain what’s likely to happen next.
So click to watch the interview now!