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Palladium Futures Hit Highest Level Since June 2015

August 10, 2016 at 17:28 by Andrew Moran

Gold and silver are not the only precious metals that are having all of the fun in 2016. Palladium has been performing remarkably well over the last 14 months. It has been able to fly under the radar and avoid all of the attention from the mainstream media, even though it recently reached its highest level in more than a year.

September palladium prices rose $39.65, or 5.7%, to $734 per ounce on Wednesday at 16:59 GMT on the Comex. Palladium has not traded this high since June 2015.

Year-to-date, palladium prices are up about 30%. Since hitting $908 an ounce in August 2014, the metal has been going through a correction, which seemed to have lasted about a year. Since then, palladium prices have been undergoing a sharp turnaround.

Palladium’s companion, platinum, has also been performing quite well. October platinum prices rose $28.10, or 2.4%, to $1,188 an ounce. Platinum is on track for its strongest finish since the first quarter of last year.

One of the reasons why palladium is doing so well is because it is a metal needed to manufacture cars. With strong vehicle sales occurring in China in the last six months because of a tax break, the demand for palladium is soaring. Platinum is also a metal that is used in the car-making process so prices could maintain their current trends.

China also made news this week when it was reported the government increased its gold holdings by more than $1 billion to $78.89 billion.

The weakness in the US dollar also offered palladium some extra support. When there is weakness in the greenback compared to its currency competitors, this makes dollar-denominated metals far more attractive to foreign buyers.

In addition, investors still have an appetite for precious metals, which are often viewed as safe haven assets. With global economic uncertainty still in the consciousness of investors and central banks maintaining low interest rates for an extended period of time, precious metals continue to be the asset of choice for investors worldwide.

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