Palladium prices slid to $2,870/oz during the last 10 days of May, off their high of $3,019 around the beginning of the month. The downtrend was driven by fluctuations in the dollar exchange rate, local risk aversion and choppy macro data out of Asia, especially from China.
A strong fundamental driver for palladium remains industrial demand for the metal, more specifically in the automotive sector. Palladium is widely used in catalytic converters, and in an industry that is turning green, the demand for this metal looks set to go up as the industry gets back on track. This is a long-term growth story, during which palladium could rise to $3,500/oz or more.
For the time being, though, the price could slide to $2,800/oz, since this support level has already been tested.