Here’s why palladium is sliding (December 29)

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Palladium Slides 11.20% Today

Highlights

UBS raised its palladium price outlook after a recent surge, underscoring notable market strength for the commodity.
Investors are monitoring US Critical Minerals Section 232 and antidumping actions, which may shift palladium bar trade flows between the US and Europe.
Global supply remains constrained, as Russia and South Africa produce 75% of mined palladium and prior Nornickel mine flooding still impacts availability.

Regulatory shifts and export risks drive sentiment amid tightening supply

UBS has raised its price projections for palladium after a notable recent surge, highlighting current market strength for the commodity. Market observers are closely following regulatory developments related to the US Critical Minerals Section 232 investigation and an antidumping petition, as these may alter international trade patterns — particularly regarding palladium bar shipments between the US and Europe. The market remains sensitive to ongoing global supply concerns, with 75% of all mined palladium coming from Russia and South Africa, and past incidents such as flooding at Nornickel's Russian mines continuing to impact supply. Demand is further supported by palladium’s continued use in catalytic converters for gasoline vehicles as electric vehicle adoption proceeds more slowly than expected.

Anton Kharitonov, expert at Traders Union, sees notable short-term fragility in palladium’s setup. He notes that price is caught below the MA-20 and technical oscillators flag overbought risks while intraday swings show strong seller control. Kharitonov remains skeptical given unresolved macro risks, especially heavy supply dependence on Russia and South Africa. He cautions that regulatory uncertainty could easily dampen confidence, despite UBS's optimism. "Traders should be wary of chasing upside, as today’s sharp reversal exposes the vulnerability in XPD’s recent rally," says Kharitonov.

Viktoras Karapetjanc, expert at Traders Union, highlights robust market momentum for palladium. He points to bullish forecasts and renewed institutional optimism after UBS’s upgrades. Karapetjanc believes ongoing supply constraints and resilient industrial demand keep the bullish structure intact. He expects constructive responses as global flows adapt to regulatory shifts. "Further growth is very likely as fundamentals and technicals align for more upside in palladium," he states.

Parshwa Turakhiya, analyst, observes a volatile yet opportunity-rich technical landscape in XPD. Turakhiya notes that the surge and subsequent sharp reversal create distinct short-term setups for active traders. The analyst sees risk for range-bound moves unless decisive breaks occur above $1,717.78 or below $1,665. "Monitor oversold signals — quick reversals can offer tactical entry points if momentum stabilizes soon," Turakhiya comments.

Medium-term buying strength clashes with intraday selling and volatility

Momentum on the daily timeframe is mixed: MACD and ADX continue to signal underlying buying strength, yet several oscillators highlight either overbought conditions or emerging weakness. RSI is elevated at 76.11 while Stochastic RSI and CCI show recent overbought readings, though intraday values are now shifting into oversold territory as sellers dominate the session. BBP points to strong selling momentum today, but the Awesome Oscillator remains positive, supporting the wider uptrend. A gap up from $1,897.51 to $1,932.46 at the open has since reversed sharply by $212.48 or 11.20%, pushing price toward today's lower range, with exceptional volatility and pronounced intraday downside pressure. This tension between robust medium-term buying and intraday weakness underscores a conflicted technical setup.

Last time, analysts noted that Palladium was exhibiting a solid bullish structure across short, medium, and long timeframes, supported by trading well above major moving averages, strong MACD and ADX momentum, and nearest dynamic support at the Ichimoku Kijun, with resistance expected near the round level above $1,850. While most indicators remained positive, several oscillators—including RSI and Stoch RSI—approached overbought territory, urging short-term caution even as buyers dominate momentum as overbought signals begin to emerge.

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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