|
| BACK FREE CHARTS GET YOUR FREE RECENT FORECASTS MORE INFO CONTACT US |
|
 |
Palladium Trading
Investing in PalladiumPlatinum and palladium are the most widely used of the six platinum group metals (PGMs), which also includes rhodium, ruthenium, osmium, and iridium. They are especially valued for their catalytic functions, their conductivity, and their resistance to corrosion. They are essential in key manufacturing processes in the automobile, chemical, petroleum refining, pharmaceutical, and electronics industries. Many of the comments about platinum also apply to palladium. However, palladium does not have as high a profile as gold or platinum, and palladium prices are considerably lower than gold or platinum, which may give it a competitive advantage in some cases. Palladium Prices & RatesAs with the other precious metals, the New York Mercantile Exchange (NYMEX) is the world's premiere exchange dealing in palladium and platinum futures contracts.
Palladium Traders have another possible way to take advantage of fluctuations in palladium prices is with a London exchange-traded fund (PHPD) or with another London-traded ETF (PHPP) that provides exposure to all four metals, gold, silver, platinum and palladium. Palladium Trading SupplyPalladium is mined with platinum and resembles it in many respects, but there are some important differences between the two metals. Palladium is also produced as a byproduct of nickel mining. Russia supplies about 65% of the worlds production, South Africa produces most of the rest, with North America providing about 8%. Annual palladium production runs approximately 8 million ounces. Russia has generally kept the market well supplied with palladium. However, the flow of palladium supplies has been erratic at times, adding further constraints into the supply chain. Some believe that Russian supplies are starting to run out, others think that officials may be controlling the flow to keep supplies tight so that a sense of scarcity will help push palladium prices higher. In any case, with the government keeping a tight rein on supplies, Russia needs to be considered a rather fickle palladium supplier. In South Africa, labor issues and problems with generating sufficient electrical power to operate mining facilities at capacity can have an impact on palladium production. With a tight supply-demand balance, disruptions in palladium output or shipments can have price consequences, sometimes occurring as sharp, brief spikes based on concerns that the flow of palladium could be curtailed. Palladium Trading TipThe most obvious tip for palladium traders is to watch platinum fundamentals and price movements closely. Whatever affects platinum is likely to also have an effect on palladium prices. Perhaps a better strategy is to follow prices of both metals, as well as gold, and trade spread relationships. A factor that sends precious metals prices higher is likely to cause a bigger move in platinum than in palladium prices. When the price gap between the two widens to high levels, sell platinum and buy palladium; when the price spread shrinks to low levels, buy platinum and sell palladium, expecting a breakout higher in metals prices to send platinum prices on a bigger run. Palladium Trading DemandAutomotive catalytic converters are the largest palladium consuming sector, accounting for nearly two-thirds of palladium consumption. Electronic equipment accounts for about 20% of usage; dental alloys, 12%; and jewelry, 4%. In addition to supply uncertainties, another fundamental issue that could support higher palladium prices is the runup to record high prices for platinum and gold. The record platinum prices make palladium an attractive option for the auto catalyst market and even the jewelry market. With more cars being produced in emerging markets such as China and India, demand for palladium in catalytic converters is likely to increase. With palladium priced at about a third the price of platinum, its not hard to figure out which metal auto manufacturers would prefer to use if they have a choice. Catalytic converters using palladium are more effective on diesel fuel engines. As demand for diesel fuel automobiles grows in Europe, demand for palladium should increase and demand for platinum from European automobile manufacturers should decrease. Of course, there are constantly rumors and reports that some new type of catalytic converter will be produced some day, and these can spark price moves in platinum and palladium, depending on how traders perceive the latest rumor, if true, might affect demand. Breaking News
|
|
* VantagePoint's accuracy statistics were computed on out-of-sample price data utilizing neural networks trained on both single market and intermarket data and relate to the Neural Index which indicates whether the average of tomorrows typical price and the typical price of the day after tomorrow (both unknowns at this time) are expected to be higher or lower than the average of yesterday's typical price and the typical price of the day before yesterday. The numerical value of the Neural Index, either a one (1) or a zero (0) thereby indicates whether or not the trend direction is expected to be higher or lower for each target market over the next two days. A Neural Network accuracy statistic of 80% does not mean that eight out of ten trades will be winning trades. VantagePoint is not a trading system that gives the same specific buy and sell signals to all users. It is a technical forecasting tool that is comprised of proprietary forecasting indicators that apply neural networks to market data for the purpose of finding patterns and relationships between markets and then using this information to make futuristic forecasts. Using these indicators each trader determines his or her own entries, exits and stop placements which may vary from those of other traders due to differences among traders in trading style, objectives, risk propensity, account size and number of contracts involved, thereby producing different trading results from one trader to another. Futures and options trading involves risk, is not for every trader, and only risk capital should be used. For more detailed information, please read our Important Disclaimer, Privacy Policy, and Software License Agreement. |
