#XPDUSD Palladium reaching long-term accumulation levels

8 nov 2023

Palladium is starting to pique my interest. After retreating from as high as $3000 at the peak in April 21' - the commodity is now down 65% and reaching interesting long term levels. Firstly the current level at approximately $1025 is where palladium peaked as far as back in January 01' - almost 22 years ago. If this becomes a point of polarity, the previous top(resistance) should start to morph into support. This level was also tested in late December 2017 after not having made new highs for 16 years! To think that the commodity is basically flat from the highest point some 22 years ago is quite something...

What makes this level even more interesting to me is that we have approached the 200 month moving average (green moving average on the chart). Interestingly, this is where the palladium price bottomed back in Late 2016 before rallying almost 500% to reach the Peak of $3000 in April 21'. Also, if you look at the RSI and MACD indicators at the bottom of my chart, you will see just how oversold the commodity is. To put it into perspective, the only time we were more oversold going back to 1997 (which is as far as i can go), was April 2003 where we traded as low as $150...

I would start accumulating here, with scope to add down at $850 should it get there, which is where we find the uptrend connecting the 2008 and 2016 lows. I will be surprised if we get that far, but I will start accumulating from current levels for a move higher. We are so stretched in price here that I do expect some mean reversion to take place in the weeks and months ahead. We are already starting to see mines having to close shafts which is telling you that PGM prices at these levels are not sustainable and something has to give sooner or later...