Palladium Prices Surpass Gold in Record Rally

APMEX

12/5/2018 12:47:11 PM

Daily Gold & Silver Market Report – 12/5/2018

• Increased demand for Palladium leads to record highs.
• Gold declines ahead of new Fed data.
• Global stocks decline as trade tensions rise.

For the first time in 16 years, the price of Palladium pushed beyond that of Gold. Driven by industrial demand, Palladium saw several record highs over the past four months, coming strikingly close to parity with Gold on a few occasions. The automotive industry is the world’s largest buyer of Palladium, one of several Platinum Group Metals. The boost in demand comes as consumers turn away from high-emission, diesel-powered vehicles that use Platinum in their catalysts. The trend is now toward gasoline and hybrid automobiles, which commonly utilize Palladium in catalytic converters. Bloomberg reports the Precious Metal could continue to build strength in 2019. 

Palladium had a strong year, fighting off the same challenges seen by other Precious Metals. Gold, Silver and Platinum all saw a great deal of volatility driven by rising U.S. dollar values and numerous interest rate hikes. During November, Palladium traded at record highs on four separate occasions as many investors believed production levels would not be able to meet demand. In 2018, there was a supply shortfall of 1.2 million ounces for Palladium, an amount expected to increase to an additional 1.4 million ounces next year.

Gold Price Retreats Ahead of New Federal Reserve Data

The U.S. Federal Reserve is expected to release its Beige Book Wednesday afternoon, which offers data insights regarding all 12 districts of the Fed. Before this announcement, Gold prices retreated after nearing a five-month high. Investing.com observed, “An upbeat reading could help put the brakes on the recent downward trend seen in the dollar, which has buoyed Gold prices of late. Weakness in the American currency increases the appeal of dollar-denominated Gold as it becomes more affordable for holders of foreign currencies.” Any effect on the market will likely be short-term, however, as additional monetary policy changes are expected by December 19.

Stocks Fall Worldwide as Trade War Builds Steam

Markets around the globe fell Wednesday following significant losses in the U.S. stock market. A weekend announcement that tariffs between the U.S. and China would be postponed for three months gave investors hope of an end to the trade war. However, statements made by President Donald Trump Tuesday, indicating tariffs would continue to be leveraged by the U.S., sent markets tumbling, according to the Wall Street Journal. While markets in the United States are closed Wednesday in a day of mourning for former President George H.W. Bush, the rest of the world continues to react. If stocks and bonds continue to buckle under pressure from trade tensions, a rally for safe-haven investments like Gold and Silver could soon follow.

At 1:40 p.m. (ET), the APMEX Gold and Silver spot prices were:

• Gold, $1,239.40 Down $4.50
• Silver, $14.57 Down $0.09
• Platinum, $802.90 Down $3.30
• Palladium, $1,248.30 Up $3.10

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