Moreover, demand for autos, along with palladium, could continue to rise if tax cuts and higher government spending in the major car markets of China and the U.S. boost auto sales, reports Jan Harvey for Reuters.
“(The) main driver for the solid performance is that palladium has the best fundamentals within precious metals,” Giovanni Staunovo, commodities analyst with UBS Wealth Management, told Reuters. “With supply stalling and demand rising, driven by strong car sales in the U.S. and China, 2017 is likely to be the sixth consecutive deficit year.”
President-elect Donald Trump has promised lower taxes and increase spending, which could further propel consumer demand for automobiles and support higher palladium prices.
“Although a few months ago we were conscious that sales may be topping out, the incoming Trump administration may change that,” Mitsubishi analyst Jonathan Butler told the Reuters Global Gold Forum. “The president-elect’s plans for tax cuts and fiscal stimulus should improve consumer confidence and may increase consumer spending on big-ticket items such as cars.”
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