Palladium ETPs receives US$12mn of inflows, the largest in nine weeks. Palladium's price fundamentals remain the strongest across the precious metals sector in our view. South African production, which accounts for 37% of global palladium production, continues to become more costly. Last week, the National Union of Mineworkers demanded pay increases of up to 60% for workers at Impala Platinum, the world's second largest platinum producer. Meanwhile, the relative demand profile is robust, relying on the US and Chinese auto markets for demand compared to that of its counterpart, platinum.

Eoin Treacy's view While the precious metals tend to be conflated in the eyes of investors, the fundamental supply inelasticity of the palladium and platinum markets sets them apart not least from a risk-adjusted perspective. Supply of these commodities is much more highly concentrated than either gold or silver and therefore any threat to South African or Russian production tends to have a positive impact on pricing.

Palladium encountered resistance below $800 three weeks ago and fell back to test the April lows near $650. It posted a failed downside break over the last two sessions and a sustained move below last week's nadir, near $630 would be required to question recovery potential.

Platinum found support on Friday in the region of $1300, to form an upside key day reversal. It followed through to the upside today and a sustained move below last week's low would be required to question potential for an additional unwinding of short positions.