LONDON — A surprise rally in gold and silver caught the eyes of investors in the first half of the year. Now, platinum and palladium are shining brighter.
Platinum’s spot price is up 12% in July, putting prices on track for the best month since 2012. Palladium is even better, jumping 17%, the most since 2008. By comparison, gold added less than 2% in July as it lost momentum after gains in the first half.
The two lesser-known precious metals, used in devices that control toxic car emissions, are benefiting from better car sales in China, concern over labour in SA and loose monetary policy from central banks around the world.
“Platinum and sometimes palladium occasionally get dragged along by gold, but here we’re also seeing internal market dynamics playing in their favour,” Citigroup analyst David Wilson said.
Analysts have speculated that stricter legislation on vehicle pollution in China will raise demand in the long term. On the supply side, South African miners are in wage talks with unions. In the past, industrial action has curbed output.
Platinum rose 0.9% to $1,146.40/oz by 11.59am in London, touching the highest in more than a year. It now leads gold for the year with a 29% gain compared with bullion’s 26%.
Palladium added 0.1% to $702.15/oz on Thursday. It has risen in all but one of the past 17 sessions.
Net-long positions held by managed money on the Comex commodity market have climbed for at least the past three weeks in both metals, exchange data showed as of last Friday.
Gold was little changed at $1,340.29/oz on Thursday.
Holdings in exchange-traded funds backed by the metal increased 3.2 tonnes to 1,999.3 tonnes on Wednesday, data compiled by Bloomberg show.
“Inflows to platinum and palladium ETFs (exchange traded funds) remain either sparse or nonexistent,” analysts at Commerzbank said. “This means that the price increase could have been mainly speculative, creating correction potential.”