The silver lining of the violent, stunning, historic collapse of palladium and how to profit from it


This is President Trump’s first week in office and a huge week for the stock market. Stock market futures cnbc However, not many noticed the palladium futures market experienced the “violent, stunning, historic collapse,” according to the well-known market commentator Dennis Gartman, the “commodity king.” Let’s drill down to exactly what happened.

On Dec. Euro to rupee exchange rate today 23, 2016, under tremendous public pressure, the Chinese government announced that by July 1, 2020, all vehicles in the Chinese market will have to comply to the tough China VI/China 6 standard, basically equivalent to the current U.S. Technical analysis of the futures markets john murphy pdf download and E.U. Mexican peso usd exchange rate standards. Fraction to decimal conversion calculator It was barely noticed in the West because of the Christmas holiday. Usd to thb chart But it was a big one in China, especially in the Chinese social media. 40 usd I could hear the cheers of Chinese citizens all the way in the U.S.!

China is facing a severe pollution problem, especially in the northern regions. Usd to kes exchange rate today There are studies pointing to car emission as one of the major sources of pollution. Online binary converter However, the Chinese government has been reluctant to implement tougher car emission standards.

Euro usd exchange rate One of the key reasons, I was told by various Chinese sources, is that the world will not have enough palladium supply for China if China implements U.S. Australian dollar rate today in indian rupees or E.U. Gold price in usa style emission standards!

Let’s look at the supply demands in the palladium market (see chart above). Gender identity You can see mining supply (primary supply) has been down for many years thanks to the underinvestment in South Africa, the main supplier of platinum and palladium.

We saw heavy ETF redemptions in the past two years to meet the strong demand. Ashley furniture warehouse edison nj The net ETF holdings were almost cut in half from the 3 million ounce (3 Moz) peak in 2014 to close to 1.5 Moz by the end of 2016.

How about the Russian stockpile of palladium? It is gone. Stock value calculator According to the recent Scotia Bank report on palladium, “Between 2004 and 2010, Russian sales from stockpiles averaged 1.2 Moz per annum. Gender roles in america They dropped to 0.78 Moz in 2011, 0.26 Moz in 2012 and 0.10 Moz in 2013 and appear to have since dried up, with the view being that surplus stocks have been depleted.”

The Chinese automobile industry consumed about 2 Moz of palladium in 2016, out of an estimated 9.5 Moz in global total supplies, up about 20% from 2015 and has been going up 10–20% annually for the past 10 years, according to the Scotia report. Joy news today If we assume 10% growth in the next four years, China will demand about 3 Moz of palladium in 2020. Usd to inr exchange rate forecast With the recent new requirements in China, we can predict that 3 Moz by 2020 may be very conservative. Hilton travel agent rates What if China demands 3.5 Moz per year or 4 Moz per year? ETF inventory is already down to 1.5 Moz after 600–700 Koz per year outflow. Cnn money premarket futures This is not sustainable. Cad to usd conversion calculator Where do you find the extra palladium? That’s why I see a potential huge spike in the palladium price similar to what we experienced in 2001, when palladium was trading at a huge premium to platinum and gold.

Here is a potential explanation of what happened in the palladium market recently: During December of 2016, a group of Chinese traders, likely very knowledgeable of the Chinese government’s forthcoming regulation, accumulated a large position of palladium for $650–700/oz. Euro today rate When the news hit the wire, palladium exploded all the way to $800/oz earlier this week. Price of gold per ounce today in usa This weekend is the Chinese New Year and the Chinese market will be closed for a week. The boxery Some traders wished to lock in profits ahead of the holiday and $800 is a historically strong resistance for palladium. Bloomberg world market futures This triggered an avalanche of selling and most stop orders were taken out because traders had so much profit to protect.

What’s going to happen next? I view this complete washout as an excellent opportunity for investors to accumulate palladium positions. Yahoo finance futures market As I discussed, I believe the chance of a spike in the palladium price in the next few years is very high. Euro pound exchange rate history You can hold a leverage future position or physical ETFs like ETFS Physical Palladium Shares (PALL) and Sprott Physical Platinum and Palladium Trust (SPPP). Futures market data Remember, if the palladium shortage happens, the futures market may or may not be able to deliver the physical metal, so a physical ETF or physical metal is preferred.

I also invested in the miners. The boxer rebellion band Platinum Group Metals Ltd. Hkd to usd exchange rate history (PTM:TSX; PLG:NYSE.MKT) did a raise recently and the stock is close to a 52-week low. Usd to zar chart The company is ramping up the Maseve mine in South Africa and is scheduled to reach commercial production in a few months, so the timing is perfect. Usd to myr forecast It also owns a giant mine called Waterberg in South Africa. Convert usd to zar I hope when the company reaches cash flow positive, the market will wake up to its potential, just like what happened to Ivanhoe Mines Ltd. Global market futures (IVN:TSX) in the past year, which owns a big PGM deposit not far from PLG.

In conclusion, if you believe in the Trump rally, believe in the recent rally in base metals, then palladium probably has the best supply-demand picture of any commodity: copper, zinc, oil, corn, uranium, you name it. Cad usd fx rate The supply deficit projected in 2020 is likely 20% or more. Convert canadian dollars to us dollars We need a lot of new mines to be built in a hurry! I believe the recent big selloff in palladium creates a great opportunity for investors who are seeking to increase palladium and platinum (which can be substituted for palladium) exposure. Famous quotes about life and death When palladium makes these kinds of historic moves, margin calls usually follow in the next few days. Pre market oil futures It can be very volatile. Cool pictures to draw easy However, a huge washout usually creates a solid bottom to move higher. Gender spectrum test I call investors’ attention to this special situation and the potential to profit from it.

Chen Lin is a full time manager of his family assets. Stock market opening times new years eve He started to write the stock newsletter What Is Chen Buying? What Is Chen Selling?, in 2009 he after successfully navigated his family portfolio during the 2008 financial crisis. Dollar to indian rupee exchange rate today For more information on Lin, visit his website at

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1) Chen Lin: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: Platinum Group Metals Ltd. Dollar exchange rate in rupees I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: None. Gold price in usa today My company has a financial relationship with the following companies mentioned in this article: None. Famous quotes on education I determined which companies would be included in this article based on my research and understanding of the sector.

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