Palladium’s steady recovery has continued this week, helped by an increase in optimism about a eurozone deal and a gradual shift to the metal at the expense of gold.
 
The metal had suffered during September and October, but supportive supply fundamentals have helped it to revive some of its 2010 style, when it was the best performing precious metal. Two weeks ago, long positions on Nymex’s palladium products were at their lowest level in more than two years, so we could be seeing the return of investment flows to palladium, as confidence returns among traders. China data has also acted as a reassuring prop for palladium futures, with GDP growth and manufacturing fairly robust.
 
The rising price of gold has also meant that consumers have begun to look for alternatives, and their eyes have alighted on palladium. Retailers have begun offering palladium products more widely, while reducing the amount of platinum in other products in favour of palladium. For ordinary consumers, palladium has the added attraction that it does not tarnish like bronze or silver. Now that the eurozone has managed to cobble together the semblance of a deal, general risk appetite should lift palladium in the short term, allowing the October recovery to continue.