Palladium and platinum prices have been volatile after investors heard of the Volkswagen Group scandal.
Industry reports are suggesting that this could be the end of diesel cars. With 40% of platinum demand coming from the making of auto catalysts for diesel cars, that’s pretty bad news for the precious metal. Platinum fell 4% after the news, although it recovered some of its losses yesterday.
On the other hand, palladium would benefit from the switch to gasoline engines and it looks like palladium investors liked the news. Palladium prices jumped 8% to a 2-month high after the news.
What This Means For Metal Buyers
It will take some time until we see the real impact that this will have in the demand for both metals. But based on how investors reacted to the news, we’ll likely see both metals trending in opposite directions in the short-to-medium term.
The upside potential of palladium might be limited by the bear market in precious metals. What seems clear is that platinum will continue to be the worst performer among precious metals for a while.