I’m catching a flight to Vancouver, but I just have to get this out before I go. This morning, palladium climbed 1.1% to $1,023.70 an ounce. That’s its highest level since 2001. A SIXTEEN-YEAR high.
Source: Finviz.com
Wow!
Palladium is only a couple hundred dollars away from catching up with gold.
Gold is doing well this morning, too. But it’s moving for different reasons than palladium.
Palladium is used in the pollution-control catalytic converters of gasoline-powered vehicles. And there’s a lot of good news there.
Strong China Auto Sales. Retail sales of cars, SUVs and multipurpose vehicles rose 2.7% to 2.3 million units in October, Bloomberg News reports. That data comes from the China Passenger Car Association.
Supply Demand Squeeze. This year, global demand for palladium is forecast to exceed 8 million ounces for the first time. Mine supply isn’t rising to meet it. The market’s supply deficit is expected to “widen significantly” to 792,000 ounces.
The Big Switch. Demand for diesel vehicles has fallen since 2015. That’s when it was revealed Volkswagen had rigged emissions data for its diesel cars. Turns out there’s no such thing as “clean diesel.” As diesel wanes, demand surges for gasoline cars and their palladium-equipped catalytic converters.
I’ve been pounding the table about palladium. Most recently on October 18. The ETFS Physical Palladium Shares ETF (NYSE: PALL), has more than doubled the performance of the S&P 500 since then.
I think this vroom-vroom metal is shifting into higher gear again.
All the best,
Sean