Platinum and Palladium Strong after European Manufacturing Data



Platinum and palladium shine

The data that came out on Tuesday, December 15, 2015, from the European Automobile Manufacturers Association[1. ACEA, or Association des Constructeurs Européens d’Automobiles in Frnech] showed that the European passenger car market recorded almost 14% more registrations in November compared to the same month in 2014. November saw nearly 1.1 million car listings. Passenger car markets in Spain, Italy, France, and Germany saw rises of 25%, 24%, 11%, and 8.9%, respectively.

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Also, the total number of vehicle sales in China witnessed a rise of almost 20%. Platinum and palladium are widely used in pollution control systems as autocatalysts. Platinum rose for the second straight day as its price gained about 1.4% in the past two trading days. This rise was due to the surge in vehicle demand. Platinum is currently trading at $856 per ounce.

Palladium too saw a significant rise of 3.3% on Tuesday alone and gained about 4.5% in the past three trading days. Additionally, palladium saw three straight days of gains.

ETFs and miners

October showed weakness in all precious metals, including platinum and palladium. Palladium has been the worst performer among precious metals in 2015, falling about 29.5% on a year-to-date basis. In a similar vein, platinum fell 29.2%. However, the current strength in the vehicles market seems to have lifted prices above their generic low levels.

ETFs that track the performance of platinum and palladium include the Physical Platinum Shares ETF (PPLT) and Physical Palladium Shares (PALL). These investments most likely follow the same track as their related precious metals. Silver also gained about 0.55% on Tuesday.

The stocks that surged on Tuesday include AngloGold Ashanti (AU), Hecla Mining (HL), and Franco-Nevada (FNV). These three stocks make up about 10.8% of the price changes in the VanEck Vectors Gold Miners ETF (GDX).


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