Palladium prices recently surged, closing at $1070.5 per ounce last Friday and reaching a five-month high of $1125.5 by September 17, 2024. This price increase reflects a robust demand increase, particularly in Europe where ETF holdings grew by 138,000 ounces this year. The strong interest from investors points to a belief that palladium might catch up to other precious metals. Nonetheless, looking back over the past several months, we see that prices were significantly higher in late 2023, with a peak close of $1256 per ounce at the end of September 2023. Since then, prices have fluctuated, dropping below the $1000 mark earlier this year, and with last week’s close, palladium indicated some recovery but still remained lower than over a year ago.
Interestingly, the market shows signs of divergence in long-term trends due to potential declines in global vehicle production, affecting palladium’s traditional use in catalytic converters, coupled with the trend of replacing palladium with platinum. The market will have to navigate these evolving dynamics as investors weigh immediate gains against future risks.
