Palladium price has advanced from $2328 above $2700 since the beginning of March, and the current price stands around $2675. Worries over a third pandemic wave worldwide could add pressure on Palladium price in the upcoming days.
Fundamental analysis: Worries over a third pandemic wave could add pressure on Palladium price
Palladium has seen a significant rise in price since the beginning of March as investors bet on a recovery that is expected to deliver the fastest economic growth since 1984. Palladium price remains in a bull market, but the renewed worries over a third pandemic wave indicate that this precious metal’s price could fall from the current price level.
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Risk aversion will likely prevail in the upcoming weeks, which is not good for Palladium price. The pandemic is still out of control, and there is still a long way to fight against this pandemic. The rise of more contagious COVID variants in the last several weeks could add pressure to this precious metal price.
“The world continues to face an unprecedented and rapidly evolving threat from COVID-19. COVID-19 vaccines are now available but face acute supply constraints while virus variants are emerging with increasingly concerning characteristics,” World Health Organization reported last week.
It is important to mention that Palladium is a precious and industrial metal, and as an industrial metal, it is primarily used in the automotive industry. The automobile industry has been affected significantly by the pandemic, and many automobile companies will remain under pressure despite some signs of recovery.
The positive news is that FED raised its GDP estimate for 2021 to 6.5% from 4.2% last week, but this optimism may be dampened if unemployment remains elevated and growth slows more than expected. European data also showed some signs of recovery last week while the European Central Bank reported that it would support the economy as long as the pandemic keeps taking its toll on economic progress.
Concerns over the pace of vaccination campaigns in some European countries also represent a big problem and leaves little hope for the full reopening of economic activities.
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Technical analysis: Bulls remain in control of the price action for now
The important resistance levels are $2700 and $2800, $2500 and $2300 represent the strong support levels. If the price jumps above $2700, it would be a signal to trade Palladium, and we have the open way to $2750.
On the other side, if the price falls below $2500, it would be a strong “sell” signal, and we have the open way to $2300.
Palladium has seen a significant rise in price since the beginning of March; still, renewed worries over a third pandemic wave could add pressure on Palladium price in the upcoming days. Bulls remain in control of the price action for now, but if the price falls below $2500, it would be a strong “sell” signal, and we have the open way to $2300.