Price of palladium plunges by 10%

The price of palladium has increased in the past few days Crashed hard. Last week, the price rose towards €45,000 per kilo, but at the time of writing, the price is below €40,000 again. This price drop of more than 10% in three trading days is the biggest correction since the start of the bull market in August.

Despite this correction, the price of palladium is still significantly higher than at the beginning of this year, when €35,000 was paid for a kilo. Compared to a year ago, the price of the precious metal has even risen by 60%.

In recent weeks, the price of palladium has gone up almost in a straight line. At one point, traders even paid a premium for immediate delivery of the precious metal. Usually these are signals that the price is no longer in line with the fundamentals and that there is indeed a bubble.

Is palladium overvalued?

Historically, platinum was usually the more expensive precious metal. The fact that this ratio has now been completely reversed is due to a shift in the car market. Platinum is used for catalytic converters of diesel cars, while palladium is used for cars with a gasoline engine. Due to stricter environmental requirements, there is now more demand for petrol cars, which also increases the demand for petrol cars. palladium Increases.

That trend won't change in the short term, but it might change in the long term. Due to the large price difference between the two precious metals, car manufacturers will develop new catalytic converters with platinum, which can be used in gasoline cars. This form of substitution will reduce the price difference between the two precious metals in the future.

Due to the large price difference, platinum is actually more attractive as an investment at the moment, according to analyst Georgette Boele of ABN Amro. Earlier this month Warned in its report on precious metals, they already indicated a possible price correction for the precious metal. She expects the price to drop to $1,200 per troy ounce by the end of this year. For the end of next year, she foresees a further drop to $1,000 per troy ounce.

Palladium price plummets