Categories: General Market Commentary
Topics: General Market Commentary

Palladium Nears Record After Hedge Funds Piled In

Oct. 22, 2018

Palladium climbed near a record as the U.S. plans to pull out of the nuclear weapons pact with Russia, fueling tensions with one of the largest producers at a time when consumers are already scrambling for supplies.

Production will trail consumption by 481,000 ounces this year and deficits will persist through 2020, leading to the “tightest” market in two decades, Citigroup Inc. analysts including Max Layton said in a note in late September. The tightness in supply has created a lucrative business of lending the metal, spurring withdrawals from exchange-traded funds.

Hedge funds have been building their bullish bets on the metal. In the week ended Oct. 16, money managers boosted their net-long position for an eighth straight week, the longest streak since January 2013. Wagers on the metal’s price advance outnumbered bearish bets by 10,122 futures and options, the most since the mid-June, Commodity Futures Trading Commission data released Oct. 19 showed.

The metal for immediate delivery climbed as much as 3.7 percent to $1,122.57 an ounce, near a record of $1,139.68 reached in mid-January. Palladium traded at $1,119.61 at 2:09 p.m. in New York.

Palladium futures for December delivery rose 3.5 percent to settle at $1,107.70 Monday on the Comex in New York, the highest close since January.

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