Precious Metals

Palladium robbing some luster from gold

Palladium is beginning to outshine gold in the eyes of precious metals investors, as demand for the scarce industrial metal pushes its price upward.

Original images courtesy of and Stillwater Mine.

Palladium’s performance thus far in 2017 is outshining its rivals among the precious metals, especially gold, according to market analysts and other experts attending the London Bullion Market Association conference Oct. 15 to 17 in Barcelona, Spain.

Presentations by market forecasters noted that the spot price of palladium had spiked to $952 an ounce, a 40 percent hike compared to last year at the same time, while gold had climbed 12 percent in the same period, to just under $1,300 an ounce. The London PM closing spot price for palladium reached $1,006 on Oct. 16, while gold’s spot price closed at $1,303.30.

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Palladium, a platinum group metal, is used heavily as an auto catalyst in automotive catalytic converters, to reduce harmful auto emissions.

Automobiles that use gasoline, diesel and other fuels are not yet feeling any price pressure from strictly electric vehicles, which utilize no catalysts.

“They're growing from a low base so it’s not really a threat to the palladium market for the next 10 years,” said Denis Sharypin, head of commodity research for Norilsk Nickel, during the LMBA conference.

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Norilsk Nickel, a Russian mining and smelting operation for nickel and palladium, is the world’s largest producer of palladium.

Sharypin projects that the increase in car sales globally will necessitate an additional 2.5 million ounces of palladium through 2025.

Palladium demand is expected to outdistance the rate of increase in supply over the next three to five years, says David Jolie, market analysis manager at the South African-based Anglo American, one of the world’s largest mining companies.

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