Palladium Prices Surge To New Record High Over $1,100 On Supply Crunch Concerns
By: GoldCore
GoldSeek.com
Thursday, 4 January 2018
– Palladium prices surge to new record high over $1,100/oz today
– Palladium surges past record nominal price seen in 2001 after 55% surge in 2017
– Best-performing precious metal and commodity of 2017 is palladium
– Palladium prices top platinum prices for first time in 16 years
– Strong Chinese car demand and switch from diesel to petrol cars sees demand surge
– Supply crunch as six year supply deficit & 2017 deficit expected to hit 83,000 ounces
– Palladium supply crunch to intensify if world’s leading producer Russia restricts supply and investors diversify into tiny palladium bullion market
Palladium prices surged to a new record nominal high today, over $1,100 an ounce on growing concerns of a supply crunch in the very small physical palladium bullion market. It is important to remember this is a nominal record high and adjusted for inflation, palladium prices would have to reach over $1,400 per ounce in order to surpass the 2001 record high.
Nymex palladium futures for March delivery increased by 2.5% to $1,087.35 yesterday after hitting $1,090.45, ‘the highest for a most-active contract in records going back to 1986’ according to Bloomberg.
Palladium prices very strong performance can be attributed to two main, complementary factors: falling supply and increased demand in the automotive industry. It has also benefited from a weak dollar, expectations of future market changes and geopolitical risk and tensions with Russia.
Supply concerns
The palladium market has seen a supply deficit for six of the last seven years. In 2017, the deficit was expected to reach 83,000 ounces.
In contrast, the platinum market has been in over supply, a situation which is expected to continue well into 2020.
According to Nymex tracked warehouse inventories shrank 25% in December. This marked the fourth consecutive annual decline.
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