Image Source: Unsplash

Palladium is soaring to the upside after reports that the United States is going to ask the G7 to put sanctions on Russian palladium as well as titanium. The problem with that is palladium is needed for catalytic converters for cars and Russia is the world’s largest producer of that all-important metal if you want to keep the internal combustion engine viable. Of course, we’re not sure that the Biden/Harris administration wants to keep the internal combustion engine viable.

Russia makes 40% of the world’s palladium and the next biggest producer is South Africa. And even though palladium is just a small part of the price of a car, the cost of palladium can significantly impact the overall cost not only in the manufacturing part of the equation but and the actual cost of securing the parts. While some may argue that the overall impact on the final price tag of the car might seem relatively small compared to other factories like labor and materials, the rising cost of palladium may lift all boats. In other words, it will feed into the already strong fundamental outlook for copper, aluminum and other industrial metals.

The precious metals, after pulling back yesterday, today are renewing their assault towards record highs or breaking new ones. And while it looks more likely that Donald Trump has a good chance to win the presidency, the uncertainty surrounding the expanding risk of war in the Middle East is keeping gold bugs firmly in place.

Reports are that Russia says that Iran is going to join the BRICS. Reuters reported, “The idea of the BRICS group ever challenging the U.S. dollar is for the fairies if China and India remain so divided and refuse to cooperate on trade, the former Goldman Sachs economist who came up with the BRIC acronym told Reuters. Russian President Vladimir Putin is using the summit of BRICS leaders to show that Western attempts to isolate Russia over the Ukraine war have failed and that Russia is building ties with the rising powers of Asia.”

Yet Gold is not convinced. Neither are global central banks that have been buying record amounts of gold to hedge against a US dollar and what they see as inept US leadership. Not to mention our soaring national debt. The Biden/Harris administration has broken debt and spending records and according to the national debt clock, the US national debt is at 7.194 trillion dollars. Our budget deficit is at 2.24 trillion.
The debt to GDP is at an astonishing and unsustainable 122.29 %. That breaks down to a debt of $105,983 per citizen – man, woman or child or $271.577 per taxpayer.
No wonder other central bankers are buying gold as they are worried about the stability of the dollar or at the very least need to hedge against the devaluing of the dollar by Biden/Harris policies.

More By This Author:

Old Time Rock And Gold - Manic Metals Report
Reinflate The Metals - Manic Metals Report
The Energy Report: In The Bunker - Monday, October 14