As consumer confidence and the U.S. economy improves, pent-up demand has helped fuel auto sales, which could also support the palladium related exchange traded fund.

Overall U.S. automobile sales for June is expected to rise 6.3% year-over-year, reports Matthew Rocco for Fox Business.

“Consumer confidence continues to be a strong factor, along with pent-up demand and for now, low interest rates, bringing shoppers into the showroom to purchase a new vehicle,” Alec Gutierrez, a senior market analyst at Kelley Blue Book, said in the Fox Business article.

Economists and analysts project annual sales rate in June of between 15.4 to 15.7 million vehicles. Ford and Chrysler anticipate the industry to finish in a range above 16 million vehicles, Reuters reports.

“America’s families are better off than they were at the beginning of the year and they believe – with good justification – that the economic expansion is going to continue,” GM Chief Economist Mustafa Mohatarem said in a statement

“The fundamentals for continued industry gains in new-vehicle sales remain intact,” Chrysler U.S. sales chief, Reid Bigland, said in a statement.

The greater demand for automotive vehicles could help boost palladium prices. Palladium is used to manufacture autocatalysts found in gasoline vehicles. The device helps convert toxic particles in the exhaust of an internal combustion engine to less toxic byproducts.

The ETFS Physical Palladium Shares ETF (NYSEArca: PALL) has gained 3.8% over the past week. PALL, though, is down 2.9% year-to-date.

For more information on palladium, visit our palladium category.

Max Chen contributed to this article.

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