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Palladium Continues Rally Despite Fundamentals

August 12, 2014 at 17:17 by Andriy Moraru

The palladium continued to rise today and managed to get quite close to its multi-year maximum even despite the lack of strong demand signals and despite the contradicting sentiment factor.

The multi-purpose metal added 1.5 percent yesterday and is showing a significant gain today. This week’s rally came rather unexpected as the US CFTC report on Commitments of Traders released on Friday has shown a noticeable increase in palladium short contracts by the speculators, while the number of long contracts fell slightly.

The ongoing rally is moving palladium price quite close to its July 17 multi-year high of $887/ounce (it was the record maximum since 2001). The strange thing is that that high has been reached following the end of workers’ strikes in South African mines. According to analysts, the metal should have stopped rising and reverse its bullish trend after the mining process had restarted to its full force, and supply had returned to the market. It appears that the palladium futures are reacting to some subtle factors, which are not quite evident to the average traders and investors.

Palladium rose from $870.30 ounce to $874.03 per troy ounce as of 17:13 GMT today. The daily high was set at $881.50 per troy ounce during early trading session.

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