Industrial Demand Brings Out Palladium ETF Luster
May 4th 2012 at 8:00am by Tom Lydon
Investors seem to have lost a bit of their appetite for gold and silver lately, but palladium, along with the exchange traded fund that follows palladium prices, have caught the attention of metals traders.
ETFS Physical Palladium Shares ETF (NYSEArca: PALL) is up about 5% the past month. The fund recently crossed over its 50-day and 200-day exponential moving averages.
“We’ve seen a recovery in sentiment, good auto sales numbers coming out of the U.S. and of China, and that’s helped, I think, investment demand for palladium,” William Rhind, ETF Securities Managing Director, said on CNBC.
“We’ve seen throughout the first quarter a strong reversal in sentiment for palladium, primarily driven by the anticipated demand by Chinese and U.S. market for more gasoline-engine vehicles,” Rhind noted in a separate CNBC piece.
Inflows into the palladium ETF show that investors are purchasing almost seven times as much palladium and platinum as gold in the first quarter, CNBC reported. Investors bought the equivalent of 197,000 ounces worth of palladium, compared to 34,000 ounces of gold. [Palladium ETF May Soon Outshine Other Metals]
“We feel it’s primarily because investors are more confident about the economy generally, but are looking at other opportunities outside of gold within the precious metals,” Rhind added.
However, it should be noted that investment demand in palladium only makes up 5% to 7% of the overall palladium price. Industrial demand is still the major factor, which makes palladium act more like a cyclical industrial metal. [Palladium ETFs Making a Comeback]
ETFS Physical Palladium Shares ETF
For more information on palladium, visit our palladium category.
Max Chen contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.