PALLADIUM and COPPER

Both Palladium and Copper have industrial use. Yet one has clearly outperformed the other over the past four years. Charts suggest the latest strength in Palladium and weakness in Copper could continue. 10 year weekly correlation between Palladium and Copper has been positive 0.4869.

Last week Palladium broke out of its year-long sideways consolidation pattern. While Copper has been in a downtrend and clearly below its long-term average. Weakness in Copper price is continuing this week with the industrial metal now challenging the strong support at 3 levels. Breakdown below 3 levels will have long-term negative implications.

Relative performance ratio between Palladium and Copper favor Palladium in the medium-term. An interesting fact is that Palladium has been outperforming Copper since the beginning of 2009. This trend should continue.