Pal­la­dium out­shines gold for first time in 16 years

Stabroek News - - WORLD NEWS -

BENGALURU, (Reuters) - Pal­la­dium is more valu­able than gold for the first time since 2002, with prices soar­ing by around 50 per­cent in less than four months to record lev­els — just as gold failed to cap­i­talise on some seem­ingly bullish sce­nar­ios.

A sus­tained sup­ply deficit cou­pled with ro­bust de­mand and ris­ing in­ter­est from spec­u­la­tors have pushed prices of pal­la­dium - used mainly in emis­sions-re­duc­ing cat­a­lysts for ve­hi­cles - from around $832 an ounce in mid-Au­gust to a high of $1,263.56 per ounce on Wed­nes­day.

Pal­la­dium was trad­ing at a premium of more than $25 an ounce to gold on Wed­nes­day, in strik­ing con­trast to about two years ago when bullion was twice as ex­pen­sive.

Gold is mean­while stuck in the dol­drums around $1,235, hav­ing largely lost out to the dol­lar this year as a U.S.-China trade row es­ca­lated against a back­drop of ris­ing in­ter­est rates.

Ex­pec­ta­tions that in­vestors might turn to gold as a safe haven as­set at a time of ris­ing eco­nomic uncer­tainty and pro­tec­tion­ism have been dented.

“It (par­ity with gold) is fun­da­men­tally jus­ti­fied. The mar­ket has been in sus­tained deficit and the ef­fects of that are be­ing borne out,” said Mar­cus Gar­vey, an­a­lyst at ICBC Stan­dard bank.

Pal­la­dium’s gains this year have over­shad­owed plat­inum as well, hav­ing over­taken its bet­ter-known sis­ter metal last year.

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