Readers may remember the December article “Platinum and Palladium” explaining the outlook for the platinum group of metals (platinum and palladium).
“With the incredibly strong dollar, this may soon change because a strong dollar will boost European cars exports to the U.S market. Palladium (PALL) has been the best performing precious metal of 2016. With the dollar at historic highs, the European auto industry is set to surge in 2017 and onwards. With it, the platinum and palladium used to create auto catalysts may also rally.
The market faces challenges from low Chinese jewelry demand, and auto-catalyst recycling. The boost to demand should defray these challenges, and the metal is likely to outperform gold and stocks going forward.”
The bullish predictions in that newsletter have come to fruition in a big way as palladium smoked the rest of the sector with an 8% gain in only two days. So far, Palladium is the best performing precious metal of 2017, and this trend is likely to continue.
Why is Palladium Rising?
Palladium is a key ingredient in automotive catalysts. These devices are used to reduce vehicle emissions and exhaust fumes. The metal is also exceedingly rare, so it benefits from both industrial demand and investment demand.
Palladium prices are up for the largely the same reason we said it would be up. Manufacturing data from both the U.S and China have surpassed expectations, especially in the automotive industry. And the U.S dollar has seen pressure from the Chinese yuan and speculation against the Fed's rate hike plans. Recent car sales have been strong, and in many areas the supply of the metal cannot keep up with demand.
Palladium Prices
Palladium currently trades at around $739.08 per ounce. Platinum is around $945.10, and gold is $1,164.43.