Platinum and palladium outshined the precious metals complex
Wednesday, rallying for a seventh day straight as the world's
largest platinum miner in South Africa said it would shut down
two mines and lay off 14,000 workers in a labor dispute.
Anglo American Platinum's move intensifies a shortfall already
expected from strong auto sales, for which the metals are used in
In the futures markets, platinum prices rose 0.54% to $1,696
an ounce, besting gold by $5 an ounce.ETFS Physical Platinum
), the most widely traded ETF tracking the white metal, added
0.24% to 165.89, a three-month high.
PPLT ended 2.5% above a 162.93 buy point in a 15-week-long
double-bottom base. It trades above both its 50- and 200-day
moving averages, indicative of a strong uptrend.
Its IBD Accumulation-Distribution Rating of B, on an A-to-E
scale with A being highest, shows institutions are heavily buying
shares and selling little. Its Relative Strength Rating of 61
means its price action has outpaced 61% of the market the past 12
Palladium, mined alongside platinum and commonly used as a
cheaper substitute, popped 2.12% to $729 an ounce.ETFS Physical
Palladium Shares (
) surged 2.22% to 71.26, an 11-month high. It sports a superior
IBD RS and Acc-Dis Ratings combination of 71 and B+, indicating a
It ended the session just above a 70.72 buy point in an
11-month-long cup-with-handle base.
However, PALL faces overhead price resistance at its February
2012 high of 71.66. Terry Sacka, chief strategist at Cornerstone
Asset Metals in Palm Beach Gardens, Fla., recommends waiting for
it to break above that level before making additional buys.
"I believe the rally is only sustainable if the debt ceiling
is resolved and the other metals begin to rally as well," Sacka
said in an email.
Goldman Sachs said palladium, copper and metallurgical coal
are its top mining commodities for 2013 in a "Commodities
Research" report released Wednesday.
Palladium traded at an average price of $646 an ounce in 2012.
Goldman's analysts project the average price will climb 21% to
$781 in 2013. They set price targets of $925 for 2014 and $1,000
"Production cuts (of about 150,000 ounces) in South Africa by
Anglo American and the lack of a supply response from Russia or
North America is expected to result in a deficit over the
short-to-medium term, even allowing significant ongoing sales
from Russian stocks," Christian Lelong, an analyst at Goldman
Sachs, and his colleagues wrote.
They believe palladium demand will grow, thanks to higher
demand for autos in China and the U.S. In addition, technological
improvements allow automakers to substitute palladium for
platinum in diesel cars, and European emissions regulations are
prompting automakers to produce more gas-burning cars instead of
Gasoline autocatalysts use either platinum or palladium, while
diesel engines use mainly platinum and require five to 10 times
as much of the material.
But as palladium prices rise, more old autocatalysts will be
recycled, says Miguel Perez-Santalla, vice president of business
development at BullionVault. "With all the old catalyst
reclamation, palladium supply should not be a problem," he said
in an email.