LONDON (Commdity Online): Stronger supply/demand fundamentals for palladium than platinum in 2012, and investors lately have been taking a slow and steady path higher, said UBS in a research note.
According to UBS, March palladium hit a four-month high of $717 an ounce after a strong U.S. jobs report Friday, although it is softer early Monday with other base and precious metals. Early in February, palladium exchange-traded-fund inflows are already more than half of the volumes seen for all of January.
So far this year, global holdings of palladium ETFs have gained some 112,300 ounces, or 7%, and are back to November levels above 1.8 million. Net length in palladium-futures speculative positioning has also risen. Palladium has a greater exposure to the U.S. auto market and therefore benefits from improving economic prospects in the country, UBS added.
“We think palladium will find itself on a better fundamental footing than platinum this year. While PGMs are expected to remain vulnerable to the ups and downs in investor risk appetite, improvements in palladium’s supply and demand should allow it to fare better,“ UBS concluded.
