Palladium Market Surges Higher Than $1,400 Due To Supply Shortage


Feb-2019 | e-Market Research | Consumer Goods & Retailing

In recent time, palladium exceeded the $1,400 mark for the very first time, since a requirement for the auto-catalyst metal beat its accessibility in the market. On the other hand, gold eased lower since the dollar earned on the better-than-anticipated US jobs data. The spot palladium surged by 2.28% to $1,390 per ounce and having the previous hit of the all-time high of $1,434.50, the palladium market has raised over 10% so far in this month. James Steel—Chief Analyst of Precious Metals at HSBC—said that the palladium market is toiling under production-consumption shortfalls.

Steel further added that adding up to palladium’s demand, were strategy initiatives to aid in supporting the demand that was revealed by China, which is the largest auto market. The cost of palladium—used majorly in releases-reducing catalysts for vehicles—has shot over 70% since hitting a low in mid-August of the last year. Palladium surpassed gold in cost terms for the first time in 16 Years in late last year. Tai Wong—Chief of Base and Precious Metals Derivatives Trading at BMO (Bank of Montreal)—said, “We are observing steady purchasing in reserved quantity or just no contribution and no one keen on selling as nobody knows where it will end.” Holdings in palladium ETFs (exchange-traded funds) followed by Reuters have almost halved from last year’s January as prices increased.

Samson Li—Precious Metals Analyst at Refinitiv GFMS—said that there is not enough supply in the market, so buyers are purchasing metals from the ETFs. In the meantime, gold declined by 0.11% to $1,292.03 for every ounce. The dollar rose following stronger than anticipated economic data reports, whereas, the pound became constant since British lawmakers required consensus on how to way out the EU (European Union). A stronger dollar constitutes in making gold more expensive for other currency holders.