Palladium Prices at Their Highest in More Than Five Weeks

By Ira Iosebashvili 

Palladium prices on Tuesday rose to their highest in more than five weeks, bolstered by hopes of stronger auto sales in the U.S.

Palladium for December delivery closed up 1.2% at $705.95 a troy ounce, its highest settlement since October 3. Prices are up 14% this month.

Driving the rally were hopes that U.S. car sales would rise in coming months, boosting demand for the metal, which is used to scrub emissions from gasoline engines.

Metals such as copper and zinc have rallied in recent weeks on improving U.S. economic data and expectations of increased fiscal spending under a new presidential administration. While classified as a precious metal, palladium's industrial uses make it popular with investors looking to bet on a rising economy.

The palladium market will post a deficit of 651,000 troy ounces this year and another shortfall in 2017 thanks to rising autocatalyst demand, HSBC said, citing a report from metals trader Johnson Matthey PLC.

In other precious metals, gold for December delivery pared gains and closed up 0.2% at $1,224.50 a troy ounce. Expectations that the Federal Reserve will raise interest rates next month have dented the metal, which struggles to compete with yield-bearing investments when rates rise.

Investors have also left gold for assets that have enjoyed big rallies in recent weeks, such as base metals or stocks, said Ira Epstein, a strategist at the Linn Group.

"People are questioning why they are owning gold in a scenario where everything else is moving higher," Mr. Epstein said.

Gold prices are down nearly 4% this month.

December silver was up 0.9% at $17.04 a troy ounce. Platinum for January delivery was up 0.1% at $934.70 a troy ounce.

Write to Ira Iosebashvili at [e-mail]

(END) Dow Jones Newswires

November 15, 2016 15:05 ET (20:05 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.