Palladium tops gold after rally powered by surge in Demand

(iStock)
(iStock)

Gold just got left behind by one of its sister metals. After a demand-fueled rally over the past four months that’s seen prices hit a record, palladium for immediate delivery topped gold following a surge higher.

Palladium, which hasn’t traded at a sustained premium to gold in 16 years, has gained as buyers scramble for supplies of the metal used in vehicle smog-control devices. Demand has risen as consumers turn away from diesel toward gasoline-powered cars, which tend to use more palladium in autocatalysts.

“People are grasping for whatever ounces of material they can get” in the palladium market, Tai Wong, head of base and precious metals trading at BMO Capital Markets, said before Wednesday’s levels were hit. “It’s very expensive to borrow, and that is perhaps the biggest factor driving the spot price higher.”

Palladium for immediate delivery climbed as much as 1.7% to a peak of $1 252.68 an ounce, and was at $1 251.88 at 09:09 in London, according to Bloomberg pricing. Spot gold was 0.2% lower at $1 236.29.

“The supply of palladium is very restricted,” Chirag Sheth, a consultant with London-based Metals Focus Ltd, said by phone from Mumbai. “The narrowing of the ratio is as much about the strong performance of palladium as about the poor performance of gold.”

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

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For only R75 per month, you have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today.
Subscribe to News24
ZAR/USD
16.09
(+0.52)
ZAR/GBP
21.00
(+0.41)
ZAR/EUR
19.03
(+0.51)
ZAR/AUD
11.48
(+0.41)
ZAR/JPY
0.15
(+0.47)
Gold
1902.00
(+0.01)
Silver
24.38
(+0.54)
Platinum
878.00
(+0.92)
Brent Crude
40.81
(-3.00)
Palladium
2358.00
(+0.45)
All Share
54574.79
(-0.58)
Top 40
50006.57
(-0.56)
Financial 15
10656.67
(+0.11)
Industrial 25
74883.08
(+0.57)
Resource 10
50872.84
(-2.34)
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Please select an option Oops! Something went wrong, please try again later.
Results
Yes, and I've gotten it.
23% - 86 votes
No, I did not.
51% - 191 votes
My landlord refused
25% - 94 votes
Vote