Palladium Jumps To 11 Month High Of $770/oz On Deficit Concerns

Palladium has gained 5.5% during the last five days of the crisis and is up 7.4% year to date. Ore deposits of palladium are rare and are mostly located in Russia and South Africa. Russian resource nationalism, as has been seen with natural gas, could lead to supply disruptions and to palladium going higher in the coming months. Some analysts believe palladium may be in deficit for most of the next decade as Russia depletes stockpiles. Also, industrial uses and investment demand for the precious metal looks set to increase.

Today’s AM fix was USD 1,333.50, EUR 971.94 and GBP 799.84 per ounce.
Yesterday’s AM fix was USD 1,339.50, EUR 973.90 and GBP 802.87 per ounce.

Gold fell $16.30 or 1.21% yesterday to $1,335.10/oz. Silver dropped $0.24 or 1.12% at $21.19/oz.

Palladium, 1994 to March 2014 – (Bloomberg)

Gold traded below its highest level in more than four months as tension between Ukraine and Russia eased leading to traders taking profits on gold.

Palladium climbed for a fifth day and jumped to an 11 month high. Palladium for June delivery rose  0.7% to $769/oz, the highest for the most active contract since August 15. Palladium has gained 5.5% during the last five days of the crisis and is up 7.4% year to date.

According to Bloomberg Industries analysts Kenneth Hoffman & Oliver Nugent, “any sanctions imposed by the EU and the U.S. on the export of Russian palladium group metals would create a serious supply shortage that may be difficult for industries to replace.”

This year will show the third consecutive deficit year in global palladium supply, according to a BI survey of analysts. Russia provided 44% of global palladium supply and 13.6% of platinum last year, according to Johnson Matthey.

According to BI, “a pick up in China’s demand for platinum group metals may offset any sanctions imposed on Russia by the U.S. and European Union. An increase of 26% sequentially in platinum imports by China in November suggests that domestic supplies are depleting. Russia has typically provided about 30% of China’s palladium imports and China may need to increase imports from the country as labor disputes in South African mines continue to affect production.”

Tensions have eased but the crisis is far from over. Russia is the world’s largest energy producer and Ukraine hosts a network of strategic pipelines that carry more than half of Russia’s gas exports to the EU. So, any conflict between the two countries threatens oil and gas supplies and puts Europe’s energy security and indeed economic recovery at risk.

Russia and Ukraine together account for roughly 40% of global grain exports, mainly wheat. Russia is also a large corn exporter and a conflict would likely lead to food and energy price inflation.

Ore deposits of palladium are rare and are mostly located in Russia and South Africa. Russian resource nationalism, as has been seen with natural gas, could lead to supply disruptions and to palladium going higher in the coming months. Some analysts believe palladium may be in deficit for most of the next decade as Russia depletes stockpiles and industrial uses and investment demand for the precious metal increase.

The 7 Key Bullion Storage Must Haves
A diversification into precious metals remains prudent and will again protect investors, both retail and institutional, pensions owners and savers, over the medium and long term. However, this is only the case if bullion owned is physical bullion coins and bars and not digital, pooled, or paper formats. Fully segregated and allocated coin and bar storage remains the safest way to own bullion.

Download your copy of 7 Key Allocated Gold Storage Must Haves here.

Tagged with: , , , , , , , , , ,
One comment on “Palladium Jumps To 11 Month High Of $770/oz On Deficit Concerns
  1. Silver 1000$ says:

    Die Russen müssen nur ihre $-Reserven in Silber umtauschen. 8-)

    Silver Eagle Sales Steal The Show While Top Silver Miners Lose Money
    http://srsroccoreport.com/silver-eagles-steal-the-show-while-top-silver-miners-lose-money/silver-eagles-steal-the-show-while-top-silver-miners-lose-money/

    In February, 2013, investors purchased 3,368,500 Silver Eagles and 80,500 oz of Gold Eagles. Thus, we had a Silver/Gold Eagle ratio of 42 to 1. This year, investors purchased 3,750,000 Silver Eagles compared to 31,000 oz of Gold Eagles. This is a staggering 121 to 1 ratio !

    Top Primary Silver Miners Continue To Lose Money

    The fourth quarter results are out from most of the primary silver miners and again… we see continued losses. Pan American Silver, Coeur and Hecla all lost fiat currency in Q4 2013:

    Q4 2013 Pan American Silver

    Silver Produced = 6.8 million oz

    Cash Cost oz = $10.81

    Adjusted Loss = $84.3 million

    Q4 2013 Coeur Mining

    Silver Produced = 4.3 million oz

    Cash Cost oz = $9.84

    Adjusted Loss = $25.1 million

    Q4 2013 Hecla Mining

    Silver Produced = 2.5 million oz

    Cash Cost oz = $7.33

    Net Income Loss = $3.0 million

    These top three primary silver miners basically gave away 13.6 million oz of silver for free (actually less than free as they lost money). If we make a simple calculation, the average loss for this group was $8.26 an ounce:

    $112.4 million losses / 13.6 million oz = -$8.26 oz

    We see the top primary silver miners are still losing money at an average realized price of silver in Q4 at $20.32 an ounce.

    Der Silber preis müsste demnach über 30$ liegen. Dann kommen noch Raffinierungskosten, Prägekosten und Steuern dazu. Die Schätzungen liegen dann zwischen 36$ und 38$ die Unze.
    Was kann ein Bänker daran nicht verstehen ???
    Angeblich können sie die Preise für Gold und Silber nicht ermitteln.
    Was die staatlichen $-Reserven angeht, würde sich wahrscheinlich jedes Land der Erde viel wohler fühlen mit ein Haufen Silber als die $-Noten. Dann würde der Preis wieder ganz anders aussehen. Ich weiss immer noch nicht, worauf die Affen warten ?
    An der Realität kommt keiner vorbei. Am Marktpreis auch nicht. Die aktuellen Preise gleichen fast einem Diebstahl. ;-)

Access The Max Keiser Podcast
Weekly Downloads, live Q & A Session and exclusive video posts from Max and Stacy

Subscribe Learn More
Buy Gold Online
Watch the latest Keiser Reports:

Watch our Google Hangouts: