Palladium continues to suffer as German car exports fall 17.2% in Q3

Berlin (Nov 29)  Germany’s car exports fell 17.2% in Q3 due to chip shortages and other supply bottlenecks. This comes as cars with combustion engines suffered but sales in electric vehicles grew. According to data from the German Federal Statistics Office, Germany exported cars for 23.1 billion euros ($26.03 billion) and imported cars for 11.2 billion euros in the period, the lowest quarterly levels since the second quarter of 2020.

It must be noted that Germany is still struggling with the effects of the COVID-19 pandemic and the introduction of the omicron variant may compound these woes.

Looking at one of the worst affected commodities, palladium is now around 41% off the high seen in May 2021. The price is now conclusively below $2000/oz and breaking through support zones consistently. The latest technical break came as the price took out the 200-period simple moving average. The last time the price was below the SMA was January 2017.

Away from this, the next major support is close to $1600/oz. Considering the price is at $1785/oz today that is some way off. On the upside, the previous wave low could be a resistance zone to watch it is marked by the black horizontal line at $1848.70/oz and it was used as support recently. All in all, this is a pretty strong downtrend and the semiconductor shortage is playing havoc on the supply vs demand chain. Until the issues are fixed it seems the precious metal will remain under pressure.

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