The explosive price action seen in palladium recently is indicative of a physical shortage.

Put simply, available inventories are failing to keep up with demand (largely from the automotive industry).

Palladium Price Chart

According to Refnitiv GFMS, the palladium market will be under-supplied by 883,000 ounces this year.

Stresses on the physical market are showing up in spiking lease rates, illiquidity, widening bid/ask spreads, and disconnections between quoted spot prices and actual physical prices. Most importantly, the deficit in palladium supply is manifesting in the form of rising prices.

Palladium hit a record, briefly touching the $2,500 level last month. And despite selling off a little in recent day ... Read more »