Palladium Faces Selling Pressure After Uptrend Break
Market Overview
Palladium’s recent decline has been driven by growing concerns over a potential global economic slowdown, which has significantly impacted demand for industrial metals. With key sectors like electronics and automotive facing reduced demand, the pressure on palladium prices has intensified. While production in North America remains constrained, rising supply from Russia—particularly from major producers like Nornickel—has added further downward pressure as additional output flows into the market. This oversupply has contributed to the continued bearish momentum in palladium.
Technical Analysis
On the four-hour chart, palladium has started a downtrend after a brief rally that began on September 9. The break of the ascending trendline signals a shift in market sentiment as buyers step back, allowing sellers to dominate. Lower highs have been formed, and the price is currently trading between the 1063.59 resistance level and the last major support at 1027.29. Should sellers maintain control, a breach of this support could pave the way for further declines toward 1012.26. Sustained downward momentum would likely target the next levels at 1004.86, 990.99, and 975.96.
Momentum indicators support the bearish outlook. The RSI is in a bearish zone, while the MACD has crossed into negative territory, confirming ongoing selling pressure. The price is also trading below key moving averages, reinforcing the downward bias.
Alternative Scenario
If buyers manage to regain control and push the price above the immediate resistance at 1063.59, the uptrend could resume. This would invalidate the bearish scenario and open the door for higher levels, but only if a sustainable move above this resistance is confirmed.
Key Levels Overview
- Resistance Levels:
- Resistance 1: 1045.44
- Resistance 2: 1063.59
- Current Price: 1039.88
- Support Levels:
- Support 1: 1027.29
- Support 2: 1012.26
- Support 3: 1004.86
- Support 4: 990.99
- Support 5: 975.96
Key Events to Watch
There are no direct palladium-specific events on the economic calendar this week. However, broader economic indicators could indirectly impact palladium prices. Shifts in demand for combustion engine vehicles, as well as the increasing use of platinum as a substitute in catalytic converters, remain key drivers for palladium’s market dynamics. Any new developments in these areas could influence investor sentiment and trigger volatility in palladium markets.
Conclusion
Palladium remains under heavy selling pressure following the break of a key uptrend, with market participants increasingly cautious due to oversupply and weaker demand from critical industries. While the technical setup points to further downside potential, a clear break below 1027.29 would confirm this bearish view. Buyers would need to push prices back above 1063.59 to regain control. For now, the outlook remains bearish, with lower supports coming into focus if sellers persist.