Palladium exchange traded funds are outshining other precious metals as consumers, who have held kept their cars for the longest period in half a century, are feeling confident enough to buy new vehicles. Severe supply deficits are also helping to support prices.
The ETFS Physical Palladium Shares (NYSEArca: PALL) gained 9.2% over the past month and it is up 21.3% over the past year. In comparison, the SPDR Gold Shares (NYSEArca: GLD) is down 4.3% in the past month and declined 13.2% over the past year. [Institutional Investors Take an Interest in Palladium ETF]
May auto sales are projected to increase 6% to 8%, with annual sales set to rebound back above 15 million vehicles, after a disappointing April result, reports Ben Klayman for Reuters.
“This is the time of year when the automotive industry holds its collective breath as the recent past has dealt with a spring slowdown in demand; however, the current pace suggests full steam ahead for the second half of 2013,” LMC senior vice president Jeff Schuster said in a statement. “Economic and market headwinds have been minimized, while demand continues to build momentum.”
About 90% of palladium produced in 2012 went into catalytic converters for gasoline-burning automobiles, reports Tatyana Shumsky for Barron’s.
“When we saw the turnaround in auto sales, that was the first sign that [palladium]price growth would continue,” Dave Meger, director of metals trading at futures brokerage Vision Financial Markets, said in the Barron’s article.