Why is palladium falling today?

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Palladium slides 6.08% today to $1,856

Highlights

Palladium futures settled at $1,651.40 per ounce on December 31, 2024, with the rally extending into late January at substantially higher prices.
Palladium remains the least liquid major precious metal, sustaining its characteristic high price volatility.
Technically, palladium last traded at $1,856.61, below the MA-20 ($1,906.80) but above the MA-50 ($1,785.61), with strong weekly bullish signals and critical support at $1,865.

Volatility stays high as rally outpaces thin market liquidity

During the recent period, palladium futures settled at $1,651.40 per ounce on December 31, 2024. The metal's rally continued into late January, with prices remaining substantially higher. Palladium remains the least liquid among major precious metals, contributing to its ongoing price volatility.

Anton Kharitonov, expert at Traders Union, sees mounting risks in palladium despite the medium-term structure holding up. He notes short-term price action is under heavy seller pressure, evidenced by a sharp 6.08% drop and significant volatility. He finds little reassurance in recent price rallies, given the metal's notorious illiquidity and frequent bull-bear reversals. Kharitonov points out that intraday momentum oscillators show exhaustion among buyers, raising odds of a sudden downside break below $1,865. "I remain cautious — any recovery above $1,910 should be treated skeptically until sellers are fully cleared out."

Viktoras Karapetjanc, expert at Traders Union, highlights palladium's resilient bullish setup over the medium and long term. He emphasizes that the price remains above major moving averages, signaling robust demand despite daily volatility. Karapetjanc points to positive weekly indicators and the potential for further gains if key resistance levels are reclaimed. Strong market structure and improving sentiment offer attractive opportunities for forward-looking traders. "The bullish structure remains intact — I expect a move above $2,078 is well within reach in the coming sessions."

Jainam Mehta, market strategist, views the current setup as mixed with a high-volatility range and conflicting momentum signals. He notes robust support from long-term moving averages but warns of intraday shifts that could offer tactical entries for nimble traders. Mehta sees opportunity in fading extremes if price approaches either end of the $1,865 to $2,078 band. "Divergence in intraday signals may provide contrarian setups for short-term traders when volatility spikes."

Seller momentum builds as volatility spikes near intraday lows

Momentum signals are mixed: MACD and ADX both remain positive on the daily timeframe, but several intraday timeframes shift bearish. Oscillators present divergence, with RSI showing modest strength while Stoch RSI and CCI highlight overbought conditions. BBP and shorter-term oscillators indicate buyers’ exhaustion and a tilt to sellers intraday. The $1,856.61 last price reflects a sharp daily drop of $120.28 or 6.08% on heavy volatility, after a notable gap up from the previous close ($2,077.56 open vs. $1,976.89 prior close), and price is currently trading near the lower end of today’s range. Intraday action is under seller pressure following the high-volatility reversal from early gains.

Last time, analysts noted that palladium was exhibiting sustained bullish momentum above key moving averages across all timeframes, with positive readings from MACD and ADX, even as near-term volatility and a sharp one-day decline revealed heavy selling pressure. Despite remaining above its primary dynamic supports, several oscillators including RSI were signaling overbought conditions, suggesting increased caution is warranted as price action wavers near resistance.

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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