The battle for $700 palladium took over a month, but as I expected, Palladium finally broke through this tough resistance level.
It’s still too early to say whether it will hold, as it could still retest that level.
However, when I was playing around a bit with Fibonacci levels (as I have done before, which is why I knew $700 was going to be a tough nut to crack), I came to a target price of $1,250…
Don’t believe me?
Look at the chart below:
- the bottom of 2008-2009 serves as the 0% line.
- as $700 has been very strong support as well as resistance, I assumed this would be a very important Fibonacci level, which is why I assumed it would be the 50% level.
- Based on the two points above, we immediately get the 100% line at $1,250.
- to make the point even stronger, look at where the other Fibonacci levels come in:
- the 23.60% level comes in at $415′ish, where palladium found initial support in 2008, and early 2010.
- the 38.20% level comes in at $575′ish, where palladium faced resistance in May 2010 and support in Oct/Nov 2011 and July/August 2012.
- the 61.80% level comes in at $835′ish, which is around the 2011 highs…
- and last but not least, the 76.40% level comes in just below $1,000, which could become a psychological resistance level…
If my Fibonacci retracement levels prove to be correct, and Palladium will rise towards $1,250, here’s a draft of what I think COULD (but of course not necessarily should) happen…
Palladium seems to be getting ready for $1,250. Are you?
Here is an excerpt of an article from Businessweek today:
Palladium reserves in Russia, the world’s largest producer of the metal, are “pretty much exhausted” and sales this year may be only 3 metric tons, according to Johnson Matthey Plc. (JMAT)
Russian inventory sales dropped 68 percent to 250,000 ounces last year from 775,000 ounces in 2011, according to Johnson Matthey. Sales from state stockpiles are expected to range from “zero to several tons” in 2013, Anton Berlin, deputy chief of ZAO Normetimpex, OAO GMK Norilsk Nickel’s sales arm, told RBC TV yesterday.
“Maybe 3 tons this year, and that will be it,” Peter Duncan, general manager of market research at Johnson Matthey, told reporters in London today. Three tons is equivalent to 96,452 troy ounces. “Russian state stockpiles have been dwindling and are now pretty much exhausted.
Read more: Businessweek
