Investment case
While the Aberdeen Standard Physical Palladium Shares ETF (PALL), which replicates the performance of palladium prices, has come under intense downward pressure since mid-June on escalating US-China trade frictions, we believe that the recent weakness offers a buying opportunity at this level, because the fundamental picture of the palladium market remains tight despite the weakening of auto trends. The backwardation in Nymex palladium corroborates this view.
Even in a bearish scenario in which Chinese auto sales continue to weaken in H2 2019, the palladium market would still experience a deficit, which