It’s interesting what a little good news can do. Precious metals traders became a little more optimistic about the recovery as reassuring economic data come forth, pushing up palladium and platinum exchange traded funds (ETFs).
Palladium and platinum rallied as the dollar declined against a basket of global currencies, which made the two metals more attractive to overseas buyers, reports Sandy Shore for the Associated Press. Palladium closed at $508 an ounce Monday, crossing the $500 per ounce mark for the first time since March 2008, and platinum ended at $1,703.80 an ounce. [How Metals ETFs Changed Investing.]
- Palladium and platinum, used in the manufacture of catalytic converters for autos, surged last week after automakers reported improving sales. U.S. auto sales jumped to a seven-month high in March. On Monday, traders became more optimistic on reports of improving demand in the services sector and for previously occupied homes. The Labor Department also calculated 162,000 new jobs created in March.
- Platinum was propped by worries of rising cash production costs, production interruptions and a lack of adequate power supply in South Africa, the world’s largest platinum producer, according to The Globe and Mail.
- Palladium and platinum prices also began a rally after ETF Securities launched the first U.S. platinum and palladium funds. The two funds have mirrored the increased demand for the two metals as the recovery picks up. [Platinum ETFs: Supply, Demand and the World Cup.]
ETF Securities is expected to offer a wider variety of commodity ETFs for the United States later this year, reports Aaron Pressman for Reuters. The London-based fund provider has raked in almost $1.3 billion from U.S. investors from its months-old metal-based funds so far and ETF Securities Chairman Graham Tuckwell says he is considering more future products for the U.S. market; however, the firm has yet to file with the U.S. Securities and Exchange Commission (SEC) for any additional ETFs. [Are Platinum ETFs Putting a Chink in Gold’s Armor?]
- ETFS Physical Platinum (NYSEArca: PPLT)
- ETFS Physical Palladium (NYSEArca: PALL)
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.