Palladium: This Year's Top-Performing Precious Metal

Cassie Bastien

10/4/2017 9:58:45 AM

Daily Gold & Silver Market Report – 10/04/2017

Analysts say Palladium is the top-performing Precious Metal thus far for 2017. In fact, the multi-purpose metal has been on a steady increase since 2016 and saw 16-year highs in June. According to UBS Analyst Joni Teves, “Perhaps there isn’t one big explanation or a specific catalyst that has led to the recent market moves, but rather a confluence of factors that have actually been brewing (and market participants) have been discussing for a while.” However, some feel the main contributor is the metal's common usage in catalytic converters. “The increasing popularity of gasoline and hybrid vehicles, both of which use palladium-rich catalytic convertors, and the marked decline in diesel vehicles, which tend to prefer Platinum converters, go a long way towards explaining the greater interest in Palladium at present, as well as perhaps why Platinum has seen only modest gains so far this year,” a report from International Banker said. While given supply and demand continue to rise, many traders do not see this trend slowing down. To reiterate, a Reuters poll of 26 analysts and traders from July showed the average Palladium price for 2017 is being predicted at $811 per ounce, 5 percent above the April poll. The International Banker report does state if such a price materializes, “it would be the highest annual average price on record, going back three decades.”

Spot Gold Finally Shows Positive Numbers

After hitting a seven-week low, Gold spot prices finally saw positive gains as the U.S. dollar pulled back from 1 1/2-month highs. According to a report from Reuters, the dollar dropped 0.2 percent Wednesday. In other news, Editor Apeksha Nair said, “Major automakers on Tuesday posted higher U.S. new vehicle sales in September as consumers in hurricane-hit parts of the country replaced flood-damaged cars, extending a rally in their shares that began when Hurricane Harvey hit southeast Texas in late August.” Those auto sales helped increase demand for Precious Metals such as Platinum and Palladium, which are highly used within the auto industry. Nair also mentioned, “The Perth Mint’s sales of Gold products actually doubled in September [compared to August sales], while Silver sales surged 78 percent,” according to a Perth Mint blog post late Tuesday.

Silver Price Rebound in Q4

It is no secret the price of Silver has been dragged down for the last month by the strengthening dollar. Editor Peter Krauth with Money Morning said, “Since Silver is priced in the dollar, any rally in the currency lowers demand from users of different currencies, which is bearish for Silver prices.” He explains this is why the price of Silver declined 1.8 percent last week. Although Precious Metal prices are seeing gains as of Wednesday's open, Krauth says short-term weakness is expected to continue. However, in the long-term, he remains bullish within the Silver market. Krauth goes on to say if Silver investors remain patient, they “will likely be rewarded before 2017 ends.” In fact, many market investors predict a spike in the price of Silver for Q4 to close out 2017 strong.

At 11:58 a.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,278.00  Up $3.60
• Silver, $16.75 Up $0.04
• Platinum, $916.30  Up $1.80
• Palladium, $923.00 Up $0.10

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