Precious Metals at the 3/4 Pole: Palladium Running Away From the Field

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The year in precious metals has been dominated by the South African platinum mining strike as well as unrest in Ukraine affecting the prices and supplies of number two platinum and palladium producer, Russia. These issues, coupled with strong currencies, especially the US dollar which has kept down the price of gold, have pushed palladium to a 13-year high and platinum higher as well.

It took two months for Amplats, Impala and Lonmin to get full  production back up after the strike and they posted big losses, from essentially losing the entire first half of the year’s production.

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Meanwhile, palladium’s price soared this summer buoyed by both the strike – as both metals are often mined together – and tougher emissions standards requiring more advanced catalytic converters. Last week, palladium hit a 13-year high and even platinum got a boost as industrial buyers began to consider it as an alternative to palladium.

The other big story in precious metals through the first half of this year has been the end of phone-based daily price “fixings” in silver and, soon, gold. For both producers of silver and gold and the banks who come up with prices, electronic, auction-based pricing systems offer much more transparency and trade volume options than the archaic daily fixes. The Silver Fix ended August 15 and the new Thomson-Reuters/CME Group LBMA Silver Price has determined the daily price since then.

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