Bulky palladium breakout signaling long-lasting worldwide tensions

If there were a yardstick for the high hazard potential of the Crimea crisis it would be the palladium market. The precious metal ranking among the platinum metals is costly worked out of nickel and copper ore in Russia. For decades, the main producer has been Russia, followed by South Africa. The world’s remainder production is just trickling along. In addition, Russia has at its disposal the worldwide highest inventory.

Because of the time and again flaring up minor’s strikes in South Africa and the thereto connected constant production decline it appears that Russia has largely been meeting the worldwide palladium need for several years also significantly controlling and determining the palladium price by its sale and supply policy. The supply deficit in 2013 amounted to estimated 23 tons.

Contrary to the more familiar precious metals gold, silver and platinum, that are used by the determining central banks and governments to conceal their monetary disgrace and money printing messes, the persistent supply deficit of the last years in primary industrial sphere (catalysts, films, relays, PCBs, medical instruments etc.) enabled and allowed palladium to tinker with its Symmetrical Triangle over three years undisturbed an absolutely quit of those manipulations:

By overcoming the 750$ mark, last Tuesday the bulky and sustained symmetrical triangle breakout started. During a trend the pattern usually forms as a continuation or as a halfway pattern as well.

The first target of the triangle breakout is the 1077$ for the time being. Considering the triangle as a harbinger of a truly gigantic halfway pattern one could reckon with a target of 1400$...

The dissolution of the palladium triangle releases the inconsistency of the existing divergences regarding the US stock markets and the leading European stock markets. Of course this breakout is going to lead to the commitment of the other precious metals to orient to palladium thereby hardly being able yet to correct really low the coming days. Gold and silver and platinum too will have to join palladium upwards now – at least for the next 2-3 months…

Whereas the US stock markets are racing from one all-time high to the next, the EU stock markets haven’t followed suit for several weeks seeming to produce lower highs and being close to the intention to swing into a downtrend. This divergence is explained on fundamental basis at the moment.

The Smart Money has obviously been fleeing from Europe, plainly going into the safe haven USA, on the one hand being invested there into the - relatively seen - still well performing stock market. For sure, the US companies aren’t running the risk of being cut from the gas supply and going down the drain many of their orders and business with Russia and its littoral states.

In economic terms the EU with its weak or spineless politician elite is tied to mother Russia’s apron strings and its main ally China.

Any interference of the economical collaboration with Russia and China, however small it may be means for the EU area an Armageddon unequalled. Recession, higher energy costs, even more cheap money are in store for the EU that is threatened with much, much more… so we all have to see about how to feather our nests…

A bang on Crimea would mean out and over for many governments in Europe because in that case unrest would follow inevitably. But the big question is: Is it going to bang??? Is it really going to???

One should look at the palladium chart with its powerful up targets and for some hints on the timing. Which conclusions you should draw… privately and/or financially will have to be left to you.

Should we be going to buy the metal or buy more for the moment – physically and paper? Or, A) because it is going to rise now for a couple of months? It just seems there’s no doubt about that. B) because it may virtually explode, so to speak as a financial hedge against all the imponderables that the Crimea crisis might cause to all other investments/properties?

C) If the precious metals mutate to a safe haven again now, palladium is supposed to belong to the top 2 of the best performing precious metals just like it did during the last years. D) Attention must be paid to really pocket the expected paper gains in palladium or to secure them because in this EU crisis/world crisis someday the expropriation or closing of the bank-, company- and trading-accounts may be in store.

The currently started new trend on monthly base may last through April 2015. Please mind now the 13 year resistance line. It is at 796 in March 2014. And this is where it is going to go next week…

Please ponder yourself which impact a palladium price of 1500-1800 (or even higher??...) until February 2015, might have to all of us…

Thanks to: Eduard Altmann