The palladium exchange traded fund jumped Wednesday as increased Chinese car sales fueled speculation that demand could outstrip auto supplies.
The ETFS Physical Palladium Shares (NYSEArca: PALL) rose 4.5% Wednesday and was up 23.0% year-to-date.
Meanwhile, the palladium spot price was 4.4% higher to $720.66 per ounce.
Palladium prices are shining after data showed Chinese vehicle sales in July gained the most in 17 months and commodities researcher CPM Group said the total supply of palladium, which is used in pollution-control devices or catalytic converters for gasoline-fueled vehicles, will trail consumption by 53,000 ounces due to production declines, Bloomberg reports.
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Palladium has been rallying over recent months due to improving car sales and signs of strength in the U.S. economy.
[related_stories]The white metal also found support from the ongoing surge in the precious metals group, led by gold, as global central banks cut interest rates and implemented more aggressive accommadative measures to stimulate growth – low borrowing costs help support precious metals since the hard assets don’t offer yields while depressing the U.S. dollar, in which the metals are priced.