The markets are still feeling the fear of a contagion effect from Europe’s debt problems. It has sent gold prices to new records and trading in exchange traded commodities (ETCs) to all-time highs.

It’s a full-on trading frenzy. Market fears have pushed gold to record prices this month while ETF Securities‘ popular platinum and palladium funds saw heavy outflows. ETF Securities now says that trading volumes in ETCs are up more than 90% in the last month alone and that 70% of the surge is because precious metals trading. Another 50% is attributable to gold, reports John Kenchington at The Financial Times.

  • Palladium was one of the hardest-hit metals last week, sinking 17.7% in just five days.
  • ETFS Physical Platinum (NYSEArca: PPLT) fell 12.5% last week.
  • SPDR Gold Shares (NYSEArca: GLD) and ETFS Physical Swiss Gold Shares (NYSEArca: SGOL) lost for the week, but are up about 1.3% so far today.

In part, metals suffered due to the dip in U.S. stocks and oil prices. Metals were also depressed by the recent data showing that U.S. consumer prices fell 0.1% in April for the first time in more than a year. [Commodity ETFs Take It on the Chin.]

Palladium prices slightly edged up on Friday as low prices and reassuring news about Europe’s efforts to contain the debt problems brought traders back to the precious metal, writes Sandy Shore for the Associated Press.

Palladium is used in manufacturing and is sensitive to investor sentiments about the global economic recovery. According to Stillwater Palladium, palladium applications include:

  • Autocatlysts in combustion engines.
  • Electrical conductivity in electronics.
  • Dental crowns and bridges.
  • Jewelry.
  • Catalytic reactions for refining petroleum.
  • Critical catalyst in manufacturing polyester.
  • Catalyst in removing toxic and carcinogenic substances from groundwater.

For more information on palladium, visit our palladium category.

  • ETFS Physical Palladium Shares (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.