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Mr. Palladium Punches Back - Craig Hemke (05/02/2019)

Feb. 06, 2019 6:51 AM ETPALL6 Comments
Sprott Money profile picture
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  • It has been a few weeks since we focused on palladium... and the last three weeks have been eventful for our new friend.
  • He's been punched lower, but has crawled up off the mat each time.
  • And now he appears ready to make another batch of new all-time highs.

By Craig Hemke

It has been a few weeks since we focused on palladium... and the last three weeks have been eventful for our new friend. He's been punched lower, but has crawled up off the mat each time. And now he appears ready to make another batch of new all-time highs.

If you've been following along, then you'll recall that Mr. Palladium became our new friend back in the late summer of 2018. Here are links to our most recent articles:

Watching Palladium Make New All-Time Highs - Craig Hemke (23/10/18)

What Is Mr. Palladium Telling Us? - Craig Hemke (04/12/2018)

Recall that as the COMEX precious metals were having a terrible time last August, palladium began to rise from the ashes. And it has been a steady rally since, rising from $832 on August 16 to a recent all-time high of $1431 on January 17. That's a five-month gain of 72%!! Additionally, it's not as if this has been some sort of crazy, speculative blow-off. Instead, it's just a steady, relentless rise. See below:

From a historical perspective, this rally has been even more significant and impressive as price has moved to new all-time highs, easily eclipsing the levels seen during the supply squeeze of 2001, which only ended after Yeltsin's Russia came to London's rescue.

Over the past few months, we've documented for you that this is almost assuredly a physical supply squeeze in London, where the primary market for physical palladium delivery exists. Two sure signs of a supply squeeze are extreme lease rates and price backwardation. Mr. Palladium has seen both, and the situation continues today with 1-month and 3-month lease rates near 20% and the COMEX futures board in full backwardation that at times has neared 10%.

But it's not all sunshine

This article was written by

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Established in February 2008, Sprott Money Ltd. is a leading precious metals wholesale, institutional and retail dealer selling gold, silver and platinum bars, coins and wafers online and over the phone. We offer competitive precious metals storage, IRA, and RRSP services, as well as a comprehensive news site.Sprott Money Ltd. is a privately held company owned by Eric Sprott and operated by Larisa Sprott.

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Comments (6)

Yes, PALDF has performed quite nicely indeed lately!
gaucho25 profile picture
Yep the metals market will play with the price. But unlike gold they need delivery. Putting IOUs in a catalytic converter dosen't seem to work. There is a squeeze in ETFs holding of palladium and in the market both of which have less palladium than the expected palladium deficit in 2019. The only pure palladium mining play outside Russia and SA is PALDF with a YoY growth in earning of %300 with avg palladium price of $1,200 per OZ.
IVEGOTTHENUTS profile picture
palladium can holds 900 times its own volume of hydrogen. .


With hydrogen cars coning online Pd will move from gas to hydrogen cars. Pd for the win 2030 5000 USD Oz
TaTrade profile picture
This is an interesting metal only downside would be a slowing of car sales around the world
Thanks for the great analysis telling the story of the current palladium market condition situation. It is easy to read and digest.

I have made a speculative bet of about 5% of my modest equity pot into two palladium miners, and have been checking the palladium price several times a day to make sure it is staying near the heights it reached recently, and not correcting sharply..

There appears to be a bit of strength in the miner stocks currently - North American Palladium (PDL.TO) has jumped up about 10% since last Friday when I bought some, before that it was up and down over the last few weeks. Impala Platinum has been gaining steadily, with less volatility, it's up over 20% since I bought some about three weeks ago.

I also have small positions in some gold and silver miners in case the palladium tight supply situation boils over, I can accept a small loss on those while I see how things develop (currently in profit by a mere $1 averaged over the three miners I am holding).
you may recall how the crooks at the comex changed the silver rules on the hunt brothers
to liquidation only.. no buying allowed.. nearly all the locals and most of the board were facing ruin so they changed the rules in mid game..
if you're long and have the money, stand for delivery while you can..
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