Meanwhile, the rising auto demand in China and North America will increase use of palladium in gasoline-fired engines.
Additionally, “good jewelry demand in China, despite slower growth, will contribute platinum’s production/consumption deficits,” the HSBC analysts added. “We anticipate further strength in jewelry demand from China as its growing middle class continues to seek out luxury goods.”
The HSBC analysts project platinum prices could average $1,595 per ounce and palladium will average $825 per ounce over 2014. Platinum is currently hovering around $1,448.8 and palladium is $788.6. [Palladium ETFs Remain in Focus on Global Headlines]
So far this year, the ETFS Physical Platinum Shares (NYSEArca: PPLT) has gained 5.1% while the ETFS Physical Palladium Shares (NYSEArca: PALL) increased 10.2%.
For more information on the precious metals, visit our palladium or platinum category.
Max Chen contributed to this article.