Palladium ETF Rallies, Tests Record Highs

Supporting the recent price surge in the palladium market, traders grew wary of potential supply concerns out of Russia in response to President Donald Trump’s plans to pull out of a nuclear treaty with Moscow. Trump said Saturday that Washington will step away from an intermediate-range Nuclear Forces Treaty with Russia, claiming that Moscow has been violating the treaty.

“The Russia dispute on nuclear arms raises a new wild card—sanctions on Russia could lock out 40% of the world palladium supply from the large mining complex at Norilsk [Nickel],” Jones said. “Regardless of potential for cooling of tensions with Russia[‘s] Norilsk, the largest producer of palladium in the world shows a major shortfall in palladium supply for the world in 2019 in their corporate presentation.”

Citigroup Inc. analysts including Max Layton said in a note that production will fall behind consumption by 481,000 ounces this year and deficits will persist through 2020, resulting in the “tightest” market in two decades, Bloomberg reports.

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