While not committing himself to a personal view, he pointed out that while the size of the Russian stockpile, which is held by the Ministry of Finance, is a state secret and that there are therefore no valid data available, annual sales in 2007 to 2009 were a "fraction of historical values" and that this is believed to be an indicator that the reserves are approaching depletion. Two years ago the government announced what it would be selling a quota over the following three years. This has also suggested to some in the market that Russian state inventories are approaching exhaustion.

Independent evidence backs this up, certainly as far as 2009 and 2010 thus far are concerned, although GFMS figures suggest that Russian inventory shipments in the middle of the "noughties" were low and in 2002 the implied figure was a net import.

The significance of this, of course, is that the global palladium market is in a deficit and the shortfall has been regularly made up (and exceeded) by Russian sales from inventory.

Eoin Treacy's view Palladium accelerated to an impressive peak near $1100 in 2001 driven primarily by Russian supply concerns. It subsequently retraced the entire advance before finding support in the region of $150 by 2003. It retested that level in 2008 before participating in a remarkably consistent advance characterised by a succession of consolidations one above another.

The medium-term uptrend was checked by a swift pullback in May which unwound the overbought condition relative to the 200-day MA in a week. Prices have held a progression of higher reaction lows since and are currently testing the April and 2008 highs. A sustained move below $525 would be required to question the consistency of the four-month uptrend and potential for a successful upward break. The ETFS Physical Palladium is tracking the spot price reasonably effectively.

Palladium has returned to an interesting level relative to platinum. It outperformed remarkably during 2001 but has ranged between 3 and 5 times since 2003. Palladium has outperformed consistently since early 2009 and is now testing the lower side of the relative range. While platinum has recently displayed signs of increased investor interest, it would need to rally much more impressively to compete with palladium on a relative strength basis. A sustained move below 3 on the ratio would increase the potential for some form of palladium supply disruption.