Palladium gains in Bloomberg index

Dhaka,  Tue,  27 June 2017
Published : 20 Jun 2017, 17:10:17
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Palladium gains in Bloomberg index

Palladium, a metal used to curb harmful fumes produced by gasoline vehicles, has risen almost a third this year, outpacing all other metals and raw materials in the Bloomberg Commodity index, according to a global media report Tuesday. 

The silvery white material, produced mainly from mines in South Africa and Russia, is benefiting from a shift in sentiment and bets that consumers will switch from diesel to gasoline cars because of concerns over emissions.

Speculative wagers on palladium have almost tripled in the past six months as investors have piled into the commodity, pushing it close to price parity with sister metal platinum for the first time in almost two decades.

But sales growth in the two largest gasoline vehicle markets - the US and China - has slowed and that could limit further gains.

Another feature of metals trading this year has been a divergence between palladium and platinum. Usually, their prices are closely correlated because both metals are used in catalytic converters, for gasoline and diesel cars respectively. 

While palladium has surged in 2017 by 28 per cent - hitting a 16-year intraday high of $914.7 an ounce this month - platinum has gained just 2 per cent this year to $923.14 an ounce.

The divergence reflects a number of factors, say analysts, including speculative demand and several years of production deficits that have eroded stockpiles and reduced available supplies. 

As the smallest precious metals market, palladium is vulnerable to sharp price swings caused by a speculative sudden flow of money. 

 
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