This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Is Palladium A Buy?

By Michelle Smith â€” Exclusive to Palladium Investing News

Is Palladium a Buy?

Standard Bank recently reported that market participants seem more confident about palladiu m's prospects compared to other precious metals.  They are not alone. Analysts are also expressing optimism about palladium. Barron's quoted Rohit Savant, senior commodity analyst for CPM Group, as saying “we are most bullish on palladium among all of the precious metals.” Three factors that appear to be driving positive sentiments are auto sales, South Africa, and a potential supply deficit.

The latest Commodity Futures Trading Commission report shows that investors are continuing to buy into palladium ETFs, and that open interest on the NYMEX has surpassed last year's average.

HSBC also recently reiterated a forecast of $785/ounce as the average price for palladium in 2012, adding that it anticipates a range of $600 to $900 this year.

Palladium demand

Bullish analysts have expressed expectations for positive palladium demand this year.

Savant projects 5.05 million ounces going into catalysts and 1.3 million ounces going into electronics.

HSBC is projecting automotive demand at 6.022 million ounces, though an estimated 1.6 million ounces will come from recovery. The bank expects electrical, electronic, and chemical demand to consume 1.52 million ounces. Jewelry is expected to consume 425,000 ounces and ETF demand another 400,000 ounces.

Auto demand

Palladium's positive performance largely hinges on demand  from the automotive sector, where the metal is used to produce catalytic converters. Thus far in 2012, there has been some reason for optimism in this regard.

Scotiabank reported that stronger than expected vehicle sales in North America have prompted automakers to schedule a further increase in vehicle assemblies.

In the US, the world's second largest auto market, February's sales numbers beat analysts' expectations, following strong sales in January. It's seen as a positive sign that this strength is occurring in the absence of a stimulus program. With an aging fleet and pent-up demand, the trend is expected to continue as long as the economy holds up.

1 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $93.59 -1.30%
FB $116.19 -0.46%
GOOG $692.01 0.14%
TSLA $239.19 -3.40%
YHOO $36.35 -0.66%


Chart of I:DJI
DOW 17,716.81 -113.95 -0.64%
S&P 500 2,057.50 -18.31 -0.88%
NASDAQ 4,759.5450 -45.7460 -0.95%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs