The tight supply of palladium in 2011 will encourage higher prices for the metal over the course of the year. Russian state stockpiles are rumored to be dwindling and may run out because of the increased industrial demand for the metal. In South Africa the ability to increase production is hampered by a lack of reliable electricity. These factors play into the rising expectations for palladium prices in 2011.
Exchange Traded Funds that deal in the precious metals have been seeing an increase in business, lately. ETF Securities said on Monday the amount of metal it holds to back its Physical Palladium exchange-traded commodity PHPD.L rose 12,628 ounces or 8 percent in the week to Feb. 6.
The stock market events of Sept. 15, 2008 have impacted all commodities markets, including precious metals such as palladium and platinum. Investors are unloading commodities at a rapid pace, in an attempt to seek safer investments.
Even with the current price drops and uncertainty surrounding when they will make a turn around, some are still bullish about precious metals in the long-term. Given the recently doom and gloom headlines regarding the American economy, an end to the downward slide could be in sight.
Palladium for June delivery in Tokyo gained 4.6 percent to close at 1,016 yen a gram ($287 an ounce), the biggest gain since Aug. 6, on expectations that rising inflation will increase demand of the commodity. For more information, click here
Tuesday, March 8, 2011