That “highlighted a generally supportive backdrop to palladium demand, exacerbated by ongoing concerns that output from top producers Russia and South Africa may be under threat,” Jonathan Butler, a precious metals strategist at Mitsubishi Corp., told Bloomberg. “We could see a bit of profit taking from here, but the $700 level seems to have been recaptured convincingly.”

SEE MORE: Forget Gold and Silver: The Case for Platinum and Palladium ETFs

Further supporting the rally on Wednesday after a decline over the past week, short traders were caught off guard and were forced to cover their bets or buyback shares.

“(Commodity) prices today are being supported by a combination of short covering and a weak dollar. Many people were a few positions short and you saw a lot of trying to cover that,” Marex Spectron’s head of precious metals David Govett told Reuters.

For more information on the palladium market, visit our palladium category.

ETFS Physical Palladium Shares

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