◆ Palladium hits new all time record high after surging 9% in a week for its biggest weekly gain since 2001 (see chart below)
◆ Palladium soared over 9% and 50% for the year to power above the key $2,500 an ounce level for the first time on Friday, boosted by a chronic shortage of the precious metal and concerns of supply from major producers South Africa and Russia
◆ The performance of palladium seen in recent months and its 50% gain in the last year is likely to be replicated by safe haven gold in the coming months given the very uncertain macroeconomic, monetary and geopolitical backdrop
Palladium soared over 9% to power above the key $2,500 an ounce level for the first time on Friday, boosted by a chronic shortage of the metal in the market and hopes the global economy might be turning the corner.
Spot palladium was 6.9% higher at $2,472.80 per ounce at 1:41 p.m. EST (1841 GMT), having earlier surged past the $2,500 an ounce level to hit a record peak of $2,537.06.
The auto-catalyst metal was also pacing for its best week since December 2001, surging more than 16%.
“This is a structural deficit market that has been brewing for years and we don’t really see an increase in supply on the horizon to quell that,” said Ryan McKay, a commodity strategist at TD Securities.
Palladium has constantly been breaking records, rising more than 50% last year, on a sustained supply squeeze and expectations for stricter emission laws across the globe.
Also helping boost prices, China and the United States signed a preliminary trade deal on Wednesday that could spur economic growth, and a Chinese auto industry group said vehicle sales would slow their decline.
Palladium is primarily used by automakers for catalytic converter manufacturing to clean car exhaust fumes.
“In an already tight market, we also have supply risks in South Africa due to the power outages,” McKay added.
South Africa, which produces two-fifths of the world’s mined palladium, released data on Thursday showing its output of platinum group metals including palladium fell 13.5% in November compared to the same month in 2018.
Platinum climbed 1.8% to $1,022.44 per ounce, having hit a peak since February 2017 at $1,041.05 in the last session. Prices were up 4% for the week.
Elsewhere, safe-haven gold edged 0.5% higher to $1,560.43 per ounce, but was headed for first weekly decline in six. Prices were down 0.1% so far for the week.
U.S. gold futures settled up 0.6% at $1,560.3.
There’s continued interest in gold buying with political, geopolitical and economic worries globally and haven-seeking buyers in countries with weak currencies, said George Gero, managing director at RBC Wealth Management.
Gold is also facing some headwinds with stocks at record highs, which is keeping it in a range of about $1,550-$1,580, Gero added.
GOLD PRICES (USD, GBP & EUR – AM/ PM LBMA Fix)
17-Jan-20 1556.50 1557.60, 1193.21 1195.15 & 1399.60 1402.93
16-Jan-20 1555.20 1554.55, 1190.97 1190.94 & 1393.61 1394.90
15-Jan-20 1551.90 1549.00, 1194.65 1189.01 & 1394.23 1389.14
14-Jan-20 1544.95 1545.10, 1190.69 1188.49 & 1387.83 1389.35
13-Jan-20 1550.35 1549.90, 1194.54 1192.96 & 1394.85 1393.52
10-Jan-20 1548.80 1553.60, 1185.45 1189.28 & 1395.78 1399.64
09-Jan-20 1547.85 1550.75, 1186.89 1188.49 & 1393.99 1396.14
08-Jan-20 1582.85 1571.95, 1206.13 1197.35 & 1421.87 1412.87
07-Jan-20 1566.50 1567.85, 1190.85 1197.05 & 1402.80 1406.52