Palladium strikes 16-year peak

LONDON: Palladium prices soared Monday to the highest level in 16 years, boosted by keen demand from automakers and investors.

At about 1030 GMT, the price of palladium hit $1,005.20 per ounce, the highest level since February 2001.

"Palladium is continuing to soar," said Commerzbank analysts in a note to clients.

"Not only does demand from the automotive industry appear robust -- speculative financial investors are also remaining loyal to palladium."

Palladium and its sister metal platinum are used to make jewellery, as well as catalytic converters in vehicles.

Natixis analysts suggested that the vast diesel emissions scandal that has engulfed the auto industry may be pushing up palladium prices.

Palladium is used in catalytic converters in petrol engines, while platinum is used in the converters for diesel engines.

Sales of diesel-powered cars have been hit in the wake of a scandal that was sparked in 2015 when German giant Volkswagen admitted to installing emissions-cheating software in the engines of 11 million diesel vehicles worldwide.

While palladium prices have soared by more than 48 percent since the beginning of the year, platinum prices have fallen by four percent.