Last year, palladium was the best-performing metal, rising by more than 40%. This year, it lost the momentum and dropped sharply. The decline was mostly because of the ongoing trade war between the United States and China. Since palladium is used in the automotive industry, its price is often seen as an indicator of vehicle demand. Therefore, with global growth being affected, traders expected fewer people to buy cars.
Starting from August however, things changed and the price of palladium has soared by more than 25%. This increase is mostly because traders have shrugged the trade fears. It is also attributed to the perception in the market that the Chinese government want to spur growth and the supply deficit in the market. This will be the third straight year of deficit increases. In July, the European Union saw a record in car registrations which was an indication that the demand for vehicles was increasing.
Palladium is mostly used in vehicle manufacturing. It is a metal similar to the platinum. Their uses are almost similar with the only difference being that while palladium is mostly used in gasoline cars, platinum is used mostly in diesel cars.
The price of palladium jumped from a low of $833 in August to a high of $1060 in September. As the demand for cars and other industrial machines increase, and as the supply for palladium decreases, the price of palladium is likely to continue moving up.
