Investors are also brushing off signs of potential automotive weakness in key markets like Europe and China.
“Investors appear to be ignoring the fact that weak sales figures have been reported for all major auto markets in recent days,” Commerzbank analysts including Daniel Briesemann said in a note. “Instead, they are seeing news such as the planned widening of a strike to include the platinum mines of a major South African gold and platinum producer as being a good reason to buy.”
“We are seeing steady buying in modest amounts; just no supply and no one willing to sell because you don’t know where it will stop,” Tai Wong, head of base and precious metals derivatives trading at BMO, told Reuters.
There is so little supply floating in the markets that some are turning to physically backed ETFs as a potential source. Holdings in palladium ETFs have almost halved from January last year as prices increased.
“There is not sufficient supply in the market, so people are purchasing metals from the ETFs,” Samson Li, a precious metals analyst at Refinitiv GFMS, told Reuters.
For more information on the palladium markets, visit our palladium category.