Palladium and precious metals-related exchange traded fund shined Tuesday after the European Automobile Manufacturer’s Association revealed the European Union car industry registered its second best monthly sales this year.
The ETFS Physical Palladium Shares (NYSEArca: PALL) rose 3.6% Tuesday. PALL, though, has declined 32.0% this year.
The palladium spot price was up 3.1% mid-Tuesday, trading around $564.3 per ounce.
The precious metal was strengthening on improving new car sales. In the Eurozone, new car sales jumped almost 14%, their second-strongest monthly sales this year, reports William Boston for the Wall Street Journal.
The European automobile industry saw new car sales rise 8.7% in the 11 months to November to 12.6 million vehicles. The higher sales has been attributed to incentives, scrappage schemes to encourage trade ins, cheap oil, the weak euro, low interest rates and a number of new model launches this year, according to Anil Valsan, global automotive analyst at Ernst & Young.
“As we move into 2016, the car market is expected to remain on the growth track,” Valsan told the Wall Street Journal.
The First Trust NASDAQ Global Auto Index Fund (NasdaqGM: CARZ), which provides access to global automobile manufacturers, was also up 0.7% on the strong car sales report.
The auto industry is a major source of industrial demand for palladium. Specifically, palladium is used in catalytic converters to reduce toxic gas emissions from gasoline-fueled cars – the auto sector consumes about 67% of the world supply of platinum for catalytic converters, according to North American Palladium.
The European Automobile Manufacturers Association data “suggests robust demand for platinum and palladium, especially since more new cars should be registered in the EU next year too,” according to Commerzbank, Platts reports.
ETFS Physical Palladium Shares
For more information on palladium, visit our palladium category.
Max Chen contributed to this article.