Palladium prices appear unable to gain any traction with the continued pressure on global equity markets, particularly in the US where many well-known tech stocks which led equities higher have fallen from favor. The S&P 500 Index remains 10% lower on the year with the Nasdaq 100 Index down by a similar 11%; palladium prices have declined by a larger 19% from January highs.
Reports of palladium outflows from ETF securities being used to satisfy near-term consumer demand may be reducing the tightness in the market and dampening investor assessment of prospective price growth. With only a moderate increase in new sales anticipated for the Chinese vehicle market and a possible slight decline forecast for the US this year, the pace of incremental growth in palladium demand may be easing, leading to a further shrinking of the supply deficit compared to that in recent years.
If so, the record high for palladium set in January of $1,139 an ounce, more than $200 above current prices, may prove to be the peak for this cycle.
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