Is Palladium Going to Be the Precious Metal Winner for 2017?

A possible deficit for palladium

Palladium seems to be the winner among precious metals for 2017 so far. As of November 21, 2017, palladium had a whopping rise of 32.5% year-to-date. That figure is far higher than the rises in gold, silver, and platinum. Platinum has the least year-to-date rise so far among the four precious metals.

There’s a lot of noise in the market about the possibility of a deficit in the palladium market. The demand for palladium looks like it’s clearly outpacing the supply. Palladium prices may be clearly reacting to this fundamental calling.

Some analysts have been suggesting for many years that palladium has a structural imbalance. Sooner or later, they’ve argued, palladium will face a supply deficit.

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Palladium versus gold

Palladium prices rose quickly, about 20.0% in a matter of almost 30 days. Such massive rises gave a niche over gold, the big brother of precious metals. The price performances of palladium and gold are seen in funds such as the ETFS Physical Palladium (PALL) and the SPDR Gold Shares (GLD). The above graph shows the performance of the two metals for the past year.

The ETFS Physical Palladium (PALL) closed at $71.20 on Friday, November 25, 2016. It’s the only ETF that’s closely tied to palladium prices. It has risen 31.5% year-to-date.

There are only a few companies that mine palladium. These miners have had a tough time in the past month as the other three precious metals saw falling prices. Mining shares such as Barrick Gold (ABX), Goldcorp (GG), Primero Mining (PPP), and Agnico-Eagle Mines (AEM) have fallen in the past month. It looks like the rise in palladium could barely help these miners.