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Palladium prices have enjoyed a good run over the past few days, partly benefiting from a spillover effect as gold prices touch new highs around the level of $1600 per ounce.
However, the metal has benefited from more than just investors seeking other solid stores of value for their wealth in these difficult times. Inventory levels for both palladium and its sister platinum remain below multi-year highs, according to Bank of America, with an absence of stockpile sales by Russia (a major producer) helping to act as a support for prices. Palladium has suffered relative to platinum due to a slowdown in Chinese car production, which uses mainly petrol-powered vehicles that utilise palladium catalysts.
However, Japanese and US palladium imports have held up well, and this, combined with an ongoing miners’ strike in South Africa and a return to demand growth in China means that palladium may well continue to increase in cost as 2011 continues.
