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PALL: Happy To Buy The Dips

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Orchid Research


  • Despite the sharp sell-off in PALL at the end of February, we remain bullish on palladium, due to its tight fundamentals.
  • PALL reached our Feb-20 target of $245 on Wednesday, February 19, having rallied by 12% on the month.
  • Speculators remain bearish on palladium. ETF investors bought some dips last week.
  • Fundamentals of the palladium market are solid, with a refined market deficit likely to exceed 1 million oz this year.
  • For March, we set a target of the Nymex palladium spot price at $2,900 per oz, implying a target for PALL at $274 per share.


Welcome to Orchid's Palladium Weekly report, in which we discuss palladium prices through the lens of the Aberdeen Standard Physical Palladium Shares ETF (NYSEARCA:PALL).

In the face of the sharp sell-off in PALL (-12%) during the last trading day of February, it is important to take perspective. Despite the sell-off in PALL last week, PALL managed to rally by around 12% in February, after a gain of 18% in January. Among the precious metals space, palladium remains the best performer on the year, after a gain of 50% in 2019.

While the sharp sell-off on February 28 took us (and many market observers) by surprise, we have not panicked. Rather, we sit tight and maintain our bullish view on PALL, due to its structurally tight fundamentals.

The broad-based sell-off across the precious metals space suggests that the sell-off in PALL was driven by macro-factors rather than micro-dynamics. We, therefore, view the sell-off as a buying opportunity.

As a reminder, we have been bullish on PALL for months, thereby benefiting greatly from the substantial rise in palladium prices.

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It is, in this vein, that we are contemplating to buy the dips in PALL. We expect PALL to reach a high of $274 per share in March.

About PALL

For investors seeking exposure to the fluctuations of palladium prices, PALL is an interesting investment vehicle because it seeks to track spot palladium prices by physically holding palladium bars, which are located in JPM vaults in London and Zurich. The vaults are inspected twice a year, including once randomly.

The Fund summary is as follows:

PALL seeks to reflect the performance of the price of physical palladium, less the Trust’s expenses.

Its expense ratio is 0.60%. In other words, a long position in PALL of $10,000 held over 12 months would cost the investor $60.

This article was written by

Orchid Research profile picture
Orchid Macro focuses essentially on commodity and macro analysis, using quantitative tools. We conduct research on supply and demand trends across commodities. We also analyze global macro dynamics and their reflexive interactions with the commodity complex. With 10+ years of experience in macro and commodity research, Orchid Research seeks not only to deliver unbiased views and accurate forecasts, but also to identify trade opportunities generating α.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Our research has not been prepared in accordance with the legal requirements designed to promote the independence of investment research. Therefore, this material cannot be considered as investment research, a research recommendation, nor a personal recommendation or advice, for regulatory purposes.

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Comments (1)

Since you talked about fundamental, would you please elaborate how does palladium physical market trades? How does China order Palladium, by which channel and by how much each time and at what market?
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