Great things are not done by impulse, but by a series of small things brought together.
Vincent Van Gogh, 1853-1890, Dutch Painter
While we remained bullish on the precious metals' sector when it took a beating towards the end of 2008 to early 2009, instead of pushing Gold or silver, our main focus was on Palladium. The reason: it was the single most ignored precious metal out there. Mass psychology dictates that when a market has taken a massive beating, and is being completely overlooked by the masses, this makes for a good investment and the astute investor should aggressively start building up a position.
When it was trading close to its lows, we even stated that it made for a better opportunity than Silver (that advantage is now over). This position appears to have paid off for Palladium has outperformed all the precious metals; from low to high Palladium tacked on over 155% making it the best performing precious metal in the past 12-13 months. From low to high, silver tacked on 120% and Gold from low to high tacked on roughly 80%.
Palladium has tested the 180 price point level several times over the course of the last 6 months and to date this zone has held and in doing so has flashed several very strong positive divergence signals, and two long term buy signals. From a short term and 3-6 month perspective, one can expect the action to remain very volatile, but from a 1-2 year perspective, Palladium is trading at an insanely cheap level; investors will only realise this later, but by then it will be too late to act.
Palladium is a very volatile metal and when it moves the moves are usually explosive in nature; this downward move has created an unbelievable long term buying opportunity for all those who failed to open up long positions in bullion when it was trading at these levels from Oct 2004 to July 2005.
On the short to intermediate time frames, palladiums strength will be determined by how it responds to the corrections in the Gold and Silver markets. If during this corrective phase Palladium can hold above 180 even if Gold trades down to the 720-750 ranges, then it would be very strong sign that an explosive move upwards is not too far off in the…
