Palladium soared to a record high last week, fuelled by speculative interest and tight supplies of the autocatalyst metal, briefly surpassing bullion, which scaled to more than a five-week peak as the dollar slid.
Palladium rose for a 15th day, heading for its longest run of gains on record and exceeding the highest-ever price of gold. Palladium’s gains on Thursday propelled it past gold’s 2011 record of $1,921.17 an ounce.
Spot palladium touched a record of $1,940.34 an ounce last week, extending its year-to-date gains to 54%. Prices have been driven by supply concerns as mines in South Africa, the world’s No. 2 palladium producer, were shut down for 24 hours this week because of electricity shortages. State power utility Eskom Holdings SOC Ltd. is still implementing rolling blackouts, although at a lower level.
Palladium is in demand for industrial uses, speculators are covering their positions, lease market is very tight, and palladium forwards are in backwardation. The metal, used mainly in emissions-reducing auto catalysts for vehicles, has gained about 49 percent since mid-August.
Metal traders feel there’s a good chance that palladium will touch $2,020 before 2020.
Platinum also gained, with spot prices adding 0.6% in New York, Bloomberg reports.
Spot gold was little changed as investors weighed the Federal Reserve’s signal that it would keep interest rates on hold through 2020. Focus now turns to trade ahead of a Sunday deadline for more U.S. tariffs on Chinese goods, as well as U.K. elections on Thursday last week.
Meanwhile, gold prices were on track for a second straight session of gains as the dollar continued to be pressured after the United States and China agreed to hold off on fresh trade tariffs for 90 days.