The Palladium metals-related ETF has hit a record high, with the palladium spot prices breaking above $1,400 for the first time ever, as industrial demand outstripped supply in the market.

The Aberdeen Standard Physical Palladium Shares ETF (NYSEArca: PALL) gained 3.5% Thursday and increased 22.2% over the past year. The spot palladium was up 2.1% to $1,394.4 and was trading as high as $1,439 earlier in the day.

“The palladium market is laboring under production-consumption deficits,” James Steel, chief precious metals analyst at HSBC, told Reuters.

Steel pointed to policy initiatives out of China, the biggest auto market, that are supportive of palladium’s demand outlook.

According to Metals Focus Ltd, the precious metal will remain in a supply deficit for an eighth consecutive year, Bloomberg reports.

Since touching a low in mid-August, palladium prices have surged 70%. Unlike gold, the precious metal has strengthened on the improved auto-industry demand outlook – palladium is mainly used in emissions-reducing catalysts or autocatalysts for vehicles.

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