Palladium set to outstrip gainsin platinum and gold

January 29, 2013

RECORDER REPORT

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Palladium is expected to set a record average high this year and platinum to post its best price performance in two years as South Africa's supply problems worsen and the economic cycle starts to favour industrial metals, a Reuters poll showed on Tuesday.

More upbeat growth prospects in China and the United States are expected to aid a demand recovery for cars - lifting automakers' demand for platinum group metals, which are used in catalytic converters - and, in platinum's case, jewellery. A survey of 37 analysts, traders and fund managers returned an average palladium price forecast of $745 an ounce for 2013, 16 percent above last year's average of $641 an ounce and topping 2011's yearly record average high of $730 an ounce.

While palladium rallied to a record intraday high of $1,095 an ounce in 2001, the average price for that year was just $596, based on an average close price recorded by Reuters. In 2014, palladium is expected to extend gains once again to set an average price of $820 an ounce. Expectations for prices of the autocatalyst metal this year are higher than those of platinum, which is expected to rise 10 percent year on year, and gold, which is forecast to rise by 6 percent. Palladium posted its biggest quarterly rise in two years in the last three months of 2012, boosted by expectations that demand from US and Chinese carmakers would improve and supply tighten.