LONDON (Commodity Online): LME prices advanced on Monday led by palladium following the HSBC flash PMI for China for October rising above 50 for the first time since June, mostly healthy commodity trade data from China as well as growing market expectations for more decisive action to emerge from the next EU Summit on Wednesday and news on bank recapitalisation pointing towards progress being made by politicians, reported Barclays Capitals.

 Palladium led the complex higher, up by 4.1% to close at $635.78/oz, its strongest close in almost a month, while platinum gained 2.2% to settle at $1539/oz. Underlying demand for the PGMs remains relatively healthy, while concerns over supply have been sidelined.

Norilsk Nickel, the world’s largest palladium producer and fourth largest producer of platinum, reported its palladium output was down by 6% y/y at 677koz while its platinum output was down by 2% y/y at 171koz.

Palladium production for the year to date is down by 5% at 2.1Moz but is marginally behind its production guidance of 2.85-2.87Moz compared to output for the full year last year of 2.86Moz. Its platinum output is up by 1% for the year to September at 536koz and is broadly in line with guidance 720koz provided in July (revised down from 750koz). PGM ETP holdings have stabilised recently but are still in negative territory for the month to date. Palladium holdings are down 86koz while platinum holdings are down 27koz.

Gold ETP holdings rose by 6 tonnes on Monday to 2186 tonnes marking the largest daily net inflow this month. Gold closed 0.7% higher at $1652.2/oz as the dollar weakened against the euro to levels not seen since early September while equity markets extended their gains.