Here’s why palladium is sliding (December 25)

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Palladium Slides 5.90% Today

Highlights

Spot palladium trading activity has increased on platforms like Dukascopy Europe, where Contracts for Difference have broadened investor access to the metal.
UBS reports that palladium posted an estimated 34% gain in December, outpacing other precious metals during a recent sector-wide rally.
Recent sessions have seen a broader rally across precious metals, indicating renewed investor interest and momentum in the sector.

Investor access widens as broader metal rally strengthens flows

Spot palladium has seen increased participation on trading platforms such as Dukascopy Europe, which continues to offer Contracts for Difference on the metal, expanding access for a broader range of investors. There has also been a broader rally across precious metals during recent sessions. UBS reports that palladium achieved an estimated 34% gain in December.

Anton Kharitonov, expert at Traders Union, views the sharp daily drop in palladium as a warning sign. He notes that technical overbought signals are peaking while the intraday reversal exposes underlying market fragility. Kharitonov is skeptical about the sustainability of recent gains, despite strong bullish indicators and a 34% December rally reported by UBS. He finds the sudden bearish turn amid high optimism concerning, especially with spot palladium now trading near session lows. "Despite appearances, there are clear signs of exhaustion — risk management is crucial as this overextension may unwind abruptly."

Viktoras Karapetjanc, expert at Traders Union, sees resilient fundamental and macro drivers supporting palladium. He highlights broad investor accessibility, robust ETF and CFD flows, and past outperformance in December as clear positives. Karapetjanc emphasizes that the dominant uptrend and expanding trading opportunities outweigh the latest short-term dip. He remains confident in the unbroken bullish structure and the high probability of further growth. "This market offers several setups, and I expect the bullish scenario to play out as long as key support holds."

Jainam Mehta, market strategist, frames the outlook as scenario-driven. He notes a divergence: momentum tools remain bullish even as short-term oscillators flash warnings. Mehta points out potential for a tactical range trade between $1,885.90 and $1,933.65 but highlights risk if sellers force a break below $1,615.77. "With sentiment stretched, a sharp reversal could set up contrarian entries around key moving averages."

Overbought signals emerge as bullish momentum diverges with selloff

Momentum on daily timeframes is firm, with both MACD and ADX confirming a strong bullish structure. However, the RSI (85.43), Stoch RSI (100.00), CCI (153.96), and BBP (202.33) all indicate pronounced overbought conditions, pointing to the risk of a near-term pullback. Sellers dominated intraday movement, as palladium dropped $110.46, slipping 5.90% with no gap between the previous close and today's open. The current price is near the session's low of $1,803.26, reflecting high volatility and clear pressure after the open. Notably, this abrupt daily decline stands in contrast to upward momentum signals, highlighting a sharp divergence between short-term oscillator warnings and underlying trend strength. The Awesome Oscillator also supports the bullish trend, though intraday tone has shifted decisively bearish.

Previously it was reported that palladium demonstrated strong bullish momentum by trading well above its key moving averages, with technical indicators such as MACD and ADX supporting a pronounced buy bias. Oscillators including RSI and Stochastic RSI signaled overbought conditions as the asset sustained its uptrend above dynamic support with resistance noted near $1,900 and strong buyer dominance prevailing.

Source of Data: XPD Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

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