Among all that glitters, the palladium exchange traded fund is outperforming while silver ETFs have been the most tarnished in the precious metals group.
The ETFS Physical Palladium Shares (NYSEArca: PALL) has increased 8.9% year-to-date, leading the precious metals pack. The palladium spot prices is currently hovering around $780.8 per ounce.
While 80% of commodity ETFs showed a negative return so far this year, PALL was among the few commodity funds to remain afloat, writes Eric Balchunas for Bloomberg.
Strong automobile sales, supply disruptions caused by South African miner strikes and sanctions against Russia all helped support palladium prices as other precious metals plunged.
November auto sales rate touched 17.2 million in November, compared to estimates of 16.7 million, Reuters reports.
“This sustained demand for new vehicles was building for years during the recession, and it should continue unless a major shift in economic stability occurs,” analyst Karl Brauer of Kelley Blue Book said in the Reuters article.
South Africa is the world’s largest platinum produce and the second-largest palladium producer behind Russia. The perceived supply risks earlier in the year highlighted the role labor strife in South Africa and economic sanctions against Russia played in boosting palladium prices. [Palladium, Platinum ETFs Can Continue to Shine]