Palladium Reaches Record High, Nears Gold Price
The demand for palladium, a precious metal used in autocatalysts for gasoline-fueled vehicles, has driven its price to record highs, bringing it closer to its more expensive counterpart, gold. As users scramble for limited supply, palladium has reached a record high for the fourth time this month.
Investors are pulling palladium from exchange-traded funds, leading to holdings at their lowest levels in nearly a decade. The cost to borrow the metal for a month has surged to more than triple the yield on 10-year Treasuries, indicating the intense competition for supply.
Daniel Ghali, a strategist at TD Securities in Toronto, highlighted the tightness of the market, stating, “This is a very tight market, there’s not enough supply for the number of buyers right now.” With thin trading volume, even small shifts can have a significant impact on the market.
Palladium for immediate delivery hit a record high of $1,204.71 an ounce, surpassing the price of spot gold at $1,220.88. The ratio of gold to palladium is now at its lowest since 2002, with one ounce of gold buying just about 1.03 ounces of palladium.
In the futures market, palladium for March delivery closed slightly lower at $1,144.60 an ounce on the New York Mercantile Exchange. Meanwhile, gold for February delivery also dipped to $1,226 an ounce on the Comex, influenced by the strength of the dollar.
The surge in palladium prices underscores the high demand for the metal and the challenges faced by users in securing adequate supply to meet their needs.
