Palladium price forecast: XPD/USD in good shape for fourth week of gains

Palladium price has bounced off last week’s low as the Russia-Ukraine crisis remains a major bullish driver. Investors remain keen on how far the Russian leader is willing to go in his attack on Ukraine.

Russia-Ukraine conflict

Russia is a major producer of palladium and platinum; both of which are used in automobiles’ catalytic converters. In 2021, the country produced about 40% of the global palladium production, which equates to about 2.6 million ounces. During the same period,it produced 641,000 ounces of platinum; 10% of the world’s production.

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Based on the significance of Russia’s palladium supplies on a global scale, concerns over the impact that the Russia-Ukraine crisis will have on supplies have been boosting prices. On Saturday, the West barred certain Russian banks from accessing the SWIFT payment system. Subsequently, traders are worried that the move may disrupt Russian exports including palladium and other commodities.

Besides, President Putin’s announcement has signalled an escalation of the ongoing war. The Russian leader has ordered the country’s military to put its nuclear forces on special alert. This comes at a time when the Ukrainian president, Volodymyr Zelenskiy, has indicated that a delegation from the country will meet Russian officials in an attempt to end the crisis diplomatically.

Palladium price prediction

Palladium price has begun the week on a rebound after plunging from a seven-month high late last week. Based on both the fundamentals and technicals, it is in good shape to recording the fourth consecutive week of gains. Since hitting its 21-month low at 1,529.23 in mid-December 2021, it has been in the green for 9 out of 12 weeks.

On a four-hour chart, it is trading above the 25 and 50-day exponential moving averages. It is also above the long-term 200-day EMA. The technical indicators signal further gains in the ensuing sessions. In the new week, I expect palladium price to remain above the 200-day EMA as the bulls remain in control.

The range between the support zone of 2,400, which is along the 50-day EMA, and the resistance level of 2,550 will be worth looking out for in the ensuing sessions. A move above the range’s upper border will likely have the bulls face resistance at 2,625.35 as they gather enough momentum to retest the multi-month high hit in the past week.