Gold now has a challenger for the mantle of most-precious metal

The scramble for palladium supply has taken the precious metal within striking distance to its costliest cousin - gold.

Palladium, used as an autocatalyst in gasoline-fueled vehicles, climbed to a record for a fourth time this month as users of the precious metal compete for limited supply. Investors continue to pull the commodity from exchange-traded funds, taking holdings to the smallest in almost a decade. The cost to borrow the raw material for a month climbed to more than triple the yield on 10-year Treasuries.

“This is a very tight market, there’s not enough supply for the number of buyers right now,” Daniel Ghali, strategist at TD Securities in Toronto, said in a telephone interview. “As tight as it is, it takes very little to move this market” because of the thin volume traded, he said.

Palladium for immediate delivery climbed as much as 1.8% to a record $1 204.71 an ounce, before trading at $1 180.78 at 13:47 in New York, according to Bloomberg pricing. With spot gold trading at $1 220.88, an ounce of the yellow metal now buys just about 1.03 ounces of palladium, the least since 2002.

In the futures market, palladium for March delivery fell 0.6% to settle at $1 144.60 an ounce on the New York Mercantile Exchange. Gold for February delivery closed 0.4% lower at $1 226 an ounce on the Comex, with dollar strength exerting downward pressure on the commodities.

* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER

ZAR/USD
17.63
(-0.04)
ZAR/GBP
23.01
(-0.05)
ZAR/EUR
20.79
(-0.01)
ZAR/AUD
12.62
(-0.03)
ZAR/JPY
0.17
(-0.01)
Gold
2034.21
(+0.05)
Silver
28.28
(+0.09)
Platinum
961.50
(+0.38)
Brent Crude
44.55
(-1.53)
Palladium
2166.01
(+0.63)
All Share
56757.73
(-1.56)
Top 40
52435.65
(-1.72)
Financial 15
9897.96
(+0.10)
Industrial 25
74671.49
(-1.98)
Resource 10
58948.78
(-1.89)
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Do you think it was a good idea for the government to approach the IMF for a $4.3 billion loan to fight Covid-19?
Please select an option Oops! Something went wrong, please try again later.
Results
Yes. We need the money.
11% - 934 votes
It depends on how the funds are used.
74% - 6256 votes
No. We should have gotten the loan elsewhere.
15% - 1285 votes
Vote