Platinum’s discount to fellow precious metal palladium has reached its highest level since 2001, as the latter soared on heightened vehicle demand and an ongoing supply deficit.
Palladium hit a high of $1,022.70 early today, just off a 16-year high from last week, while platinum hit a low of $887.50 per ounce, putting it on track for its biggest weekly loss in nine months.
The platinum discount widened to around $120, the steepest since April 2001, according to Reuters data going back to 1985.
The prices moved back a little by late morning to $1,004.42 for Palladium and $893.30 for platinum.
“Palladium is powering on with the demand for more vehicles,” said George Gero, managing director of RBC Wealth Management in New York told Reuters.
There’s more need for palladium, which cannot be reclaimed as easily or as often from junked automobiles as platinum.”
Both platinum and palladium are used in catalytic converters in car exhaust systems.
However, palladium is in higher demand in the US and the Caribbean, particularly lately, as consumers replace vehicles damaged in recent storms, Gero said.
US automakers said vehicle sales rose 1.3% for November versus the year prior, while China, the world’s largest auto market, saw a 2% rise in auto sales in October compared with the year prior.