17/12/2019 Palladium Takes Out $2,000 as BMO Says This Time Looks Different - Bloomberg

Markets

Palladium Takes Out $2,000 as BMO Says

This Time Looks Different
By Ranjeetha Pakiam and Luzi-Ann Javier
17 December 2019, 05:53 GMT
Updated on 17 December 2019, 06:36 GMT

Metal in autocatalysts in deficit as emissions rules tighten

Citigroup forecasts that prices will extend advance to $2,500

Sometimes the usual rules may not apply.

Palladium smashed through $2,000 an ounce to a record as the metal extended a powerful
annual advance driven by a sustained global deficit, with market watchers saying the shortfall
will be extremely hard to fill.

“In most cases, the cure for high prices is high prices, but not for palladium,” Tai Wong at
BMO Capital Markets, said before the $2,000 level was taken out. That refers to the notion in
raw materials that a rally induces fresh output, triggering the conditions that then roll back
the advance.

Palladium has surged to unprecedented levels in 2019 as tighter emissions rules spurred
demand for the metal used in autocatalysts, while supply hasn’t yet been able to respond.
Citigroup Inc. forecasts the move upward now has the potential to see prices gain to $2,500

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17/12/2019 Palladium Takes Out $2,000 as BMO Says This Time Looks Different - Bloomberg

in the first half of next year. Power outages in major producer South Africa have hurt mine
operations this month, fueling gains.

“There doesn’t seem to be any new, ready supply at any reasonable price,” Wong said. “So, it
could continue to move higher from here, though perhaps with more volatility.”

Spot palladium climbed as much as 1.1% to $2,000.35 an ounce, before trading at $1,997.70 at
6:32 a.m. in London. Prices are 58% higher this year, set to close out a seventh quarterly
increase.

READ MORE:

Palladium Is Now More Expensive Than Gold Has Ever Been

Palladium’s Up 50% in ‘19 and Citi Says Rally Still Has Legs

Why Palladium Is Suddenly a More Precious Metal: QuickTake

Palladium Bulls Shrug Off Growth Concerns in Bet on Records

Many raw materials gained this week after the breakthrough between the U.S. and China to
forge an initial trade agreement, bolstering prospects for global economic growth and auto
demand.

In this article
BMO
BANK OF MONTREAL
101.74 CAD +0.27 +0.27%

C
CITIGROUP INC
76.91 USD +0.52 +0.68%

GC1
Gold
1,480.90 USD/t oz. +0.40 +0.03%

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