Monday, April 5, 2010

Palladium Physical Price Hits 2 yr High

Joe mentioned early in January watch out for palladium which he thought would do well especially SWC, today Palladium hit 2 yr high:

Palladium rose to a two-year high above $500 an ounce on Monday, and sister-metal platinum reached its priciest since August 2008 backed by strong investment demand due to an improving auto-sector outlook.

A softer dollar also bolstered equities crude oil and gold, which rose to a near one-month high.

Inflows into the U.S. platinum and palladium exchange traded funds and optimism about the global economic recovery have spurred buying of the underlying platinum group metals, which are used in the auto industry for catalytic converters and also in jewelry.

Platinum was underpinned by worries about rising cash production costs, production interruptions, and a lack of adequate power supply in South Africa, the world's largest producer of the metal.

"The global auto recovery, the impact of the softer U.S. dollar, and potential supply concerns out of South Africa are driving platinum group metal prices," said William Rhind, strategic director of ETF Securities Ltd' U.S. unit.

Spot palladium rose to $500.50 an ounce, its strongest price since March 2008. In late New York trade it was at $500 an ounce, up from $490 late the previous session on Thursday.

New York June palladium futures settled up $16.65 at $508.00 an ounce on Monday.

Palladium and platinum prices began to rally in January after London-based ETF Securities launched the first U.S. platinum and palladium funds, which now hold about 900,000 ounces of the combined metals.

"There is strong investment demand in the U.S. because of the platinum and palladium ETFs, and the recovery in the auto sector, particularly in the very strong developing markets, such as China, has led to a pick-up in demand," said Carlos Sanchez, precious metals analyst at commodities consultant CPM Group.

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