Platinum and palladium will also benefit from positive spill overs from gold and silver in an extended negative real rate and range bound dollar environment. The improving global economy and stronger car demand, especially among European and Chinese consumers, will also drive industrial demand. Palladium is also benefiting from a weak dollar. Commodities are denominated in dollars and the dollar is one of the worst-performing major currencies this year.

Dwindling supplies are also helping palladium as the metal is again expected to be in a supply deficit this year.

“Supply is set to trail demand by the most in at least seven years, according to researcher Metals Focus, while inventories in warehouses tracked by the New York Mercantile Exchange have shrunk by 45 percent this year,” according to Bloomberg.

Russia and South Africa are the two largest palladium-producing nations.

For more information on the palladium market, visit our palladium category.