Palladium Surges To 14 Year High; “Can Go To $1,000” On Miner Strikes [ETFS Physical Palladium Shares]

But there are technical issues too…

Some investors and analysts see ETFs playing a role in driving up palladium prices. The amount of metal these funds hold has risen this year after two new funds were launched. Total holdings of palladium by ETFs stood just shy of 2.8 million ounces at the end of May, exceeding the annual production of Russia.

But not everyone is so exuberant…

To be sure, prices would likely drop if the walkout ends. Prices fell nearly 5% in the month after the last major mining strike was resolved in September 2012, though they later recovered. Demand from the auto industry, though improving, may not be strong enough to keep prices high without supply concerns also lending support, analysts say.

“Investors will have every excuse to sell above $850 per ounce,” said Rohit Savant, an analyst with CPM Group. “Breaking much further above that won’t be easy.”

While, for now, it appears fundamental supply and demand characteristics are still in place, we suspect this is yet another ETF/synthetic tail wagging the physical commodity dog…

This article is brought to you courtesy of Tyler Durden From Zero Hedge.

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