Palladium vs Platinum
Platinum may be the prettier girl but it is palladium that is making the gains.
Palladium has continued to make profits with a soaring 57 percent compared to platinum which has managed just under half that margin, 23 percent.
In fact Platinum has retreated somewhat as it is still trading at almost 25 percent below its ten hear high in 2008. Palladium, on the other hand has established its own ten year peak to 858 dollars an ounce and has balanced back just 15 percent to 743 per ounce, at the time of writing.
Palladium also looks decidedly positive with the pick up of the auto industry and a 1000 dollars an ounce is not out of reach in the coming months.
63 percent of all palladium is used in the auto industry and according to Scotia bank's recent Global Auto Report, car sales in the world's largest emerging markets, China, India, Brazil and Russia, are about to set new records this year. Even U.S. and Canadian sales are starting to advance again.
Fatih Birol, the chief economist for the International Energy Agency (IEA), once pointed out that 700 out of every 1,000 people in the United States and 500 out of every 1,000 in Europe own cars today. But the new emerging auto market in China where only 30 out of 1,000 own cars currently, Birol thinks that figure could jump to 240 out of every 1,000 by 2035. That is a massive hike and a big boom to the palladium industry.
This means a potential decrease in global palladium supplies and a consequent rise in prices. As I said, 1000 dollars an ounce is not out of the question over the coming years or even months.
Palladium has been, traditionally in plentiful supply with almost one million ouces in surplus, but according to SFA Oxford, a consultancy specializinf in the Platinum and Palladium range of precious metals, that has just reversed into a net shortage of 210,000 ounces and that looks like that shortage is going to get bigger.
As far as Palladium vs Platinum is concerned, the graph displayed shows palladium is a consistent strength of palladium has outperformed platinum and looks set to continue on a strong steady increase.
Palladium subject to insider trading?
The Commodity Futures Trading Commission (CFTC), is the agency responsible for regulating US futures and options markets. They are currently alleging that a Mr Chris Pia attempted to manipulate the settlement prices for platinum and palladium on the NYMEX during November 2007 to May 2008. While it is likely that attempts to manipulate many of the precious metal markets are attempted, with some success it seems. Mr Chris Pia was a portfolio manager for Moore Capital Management trading an impressive 15billion dollars in assets. The CFTC allege Mr Pia was using a strategy called, "banging the close." (A manipulative or disruptive trading practice whereby a trader buys or sells a large number of futures contracts during the closing period of a futures contract (that is, the period during which the futures settlement price is determined) in order to benefit an even larger position in an option. Source: www.cftc.gov)
According to the CFTC, "Pia would execute a large number of market-on-close buy orders. Either directly or through execution clerks employed by Moore Capital Management, Pia would inform a trader of the need to place anywhere between 20 to 100 buy orders. These orders were given with directions indicating that Pia wanted to push up the settlement prices. To help ensure the desired results, the trader would wait until the last ten seconds of the closing period to relay the orders to the floor clerk in the trading pit."
However, according to a source at the National Futures Association (NFA) this type of market manipulation has been going on for a long time, and is difficult to catch. Although steps are in place to monitor for this type of activity it was not immediately picked up and in this case it was apparently complaints from other traders that tipped off the regulators.
Last Ppril Moore Capital management were ordered to pay 25 million for Pia's illegal trading. An expensive price to pay for an employee manipulating the system. It is likely more steps will be taken to mionitor such behaviour in the future.
Pia himself submitted an offer of settlement and is also subject to more training and a stricter reporting and record keeping as well as pay for a monitor to check his activities in the future.
GoldMoney adds palladium to cater for growing investor demand
GoldMoney, the physical bullion provider which safeguards over $1.5bn of precious metals and currencies, has announced it is now offering palladium to its customers. This new addition to its precious metals range means GoldMoney can now cater for growing investor demand for the rare metal, whose price has risen from $450 per ounce to $750 per ounce in the past 12 months.
Many investors believe that the outlook for palladium is very strong, particularly with a growing Chinese demand for the metal. Palladium is widely used in catalytic converters. With automotive production increasing to cater for the growing Asian consumer market, palladium is seen as a good investment and a cheaper version of platinum because of its similar properties. Last year the volume of car sales in China overtook that of America for the first time.
Speculation on future palladium supply has also grown. South Africa and Russia currently account for almost 90% of the world's production and below ground stocks are depleting.
"Our customers buy gold and silver as the smart way to preserve their purchasing power, but they are also interested in buying palladium and platinum to diversify and optimise their investment portfolio. For this reason we have expanded our product offering to allow our customers to get a broad range of precious metals from a single source." says Geoff Turk, CEO of GoldMoney.
You can find out more at goldmoney.com.
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