Palladium’s catalyst

London (Jan 22)  Since the start of the year palladium has been by far the best performing commodity, up almost 16% to almost $790 per oz. In contrast to the stellar performance from palladium, its precious metal kin platinum (+8%), silver (+7%) and gold (+5%) lag well behind. Palladium typically performs well at this time of year. Since 2000 the median increase in January versus the month earlier has been 3.4% with prices increasing over 80% of the time. But what has been behind the increase this year?

Much of the gain has just been due to a rebound in sentiment towards precious metals in general since the start of the year. A decline in yields on US Treasury bonds in the US has encouraged investors to move funds towards other perceived safe havens, gold in particular but also by extension silver and other precious metals. There were also signs, going into late 2016 that precious metals were also very much oversold compared, and that based on historical trends were likely to rise in the months ahead.

Source: MaterialsRisk