Palladium: From Boom to Bust – See How Geopolitics Shaped Its Future in 2024!

New York City – Palladium, a unique chemical element belonging to the platinum group of metals, has been a topic of interest due to its recent fluctuations in the futures market. Alongside its counterpart platinum, palladium has seen significant price movements, offering intriguing trading opportunities on the CME’s NYMEX division.

Analysts have noted a collapse in palladium’s premium over platinum, with futures trading at $1,090.50 per ounce before dropping to $856 in February 2024. The decline, attributed to geopolitical events such as the war in Ukraine, has raised questions about the metal’s future trajectory.

Palladium futures reached a record high of $3,380.50 per ounce in March 2022 following Russia’s invasion of Ukraine. With Russia being a key producer of palladium, supply fears stemming from sanctions and geopolitical tensions have heavily influenced market sentiment.

In 2023, global palladium production totaled 210 metric tons, with Russia and South Africa contributing significantly, accounting for 77.6% of the worldwide output. As the war in Ukraine persists, palladium prices have seen a sharp decline, falling to under one-third of their 2022 peak.

Despite the recent lows in February 2024, there is speculation about a potential recovery in palladium prices. Factors like increased demand for palladium in green initiatives and uncertainties surrounding Russia’s strategic stockpiles could impact future price movements.

Investors looking to gain exposure to palladium have options such as the Aberdeen Physical Palladium ETF product (“PALL”), which tracks the metal’s price. The ETF, holding 100% of its assets in physical palladium bullion, has attracted attention amid the ongoing market volatility.

As palladium prices consolidate around the $1,000 per ounce level, experts suggest considering adding palladium to portfolios. The metal’s price movements in 2023 and early 2024 have sparked discussions about a potential recovery rally in the coming months, highlighting the continued interest in this precious and strategic metal.