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Palladium is now more expensive than gold has ever been

Supply concerns following temporary mine closures are driving the increase in price.
Palladium gains past gold's record amid 15-day rally. Image: Bloomberg

Palladium rose for a 15th day, heading for its longest run of gains on record and exceeding the highest-ever price of gold.

Spot palladium touched a record of $1 940.34 an ounce Thursday, extending its year-to-date gains to 54%. Prices have been driven by supply concerns as mines in South Africa, the world’s No. 2 palladium producer, were shut down for 24 hours this week because of electricity shortages. State power utility Eskom is still implementing rolling blackouts, although at a lower level.

Read: Load shedding set to continue as some Eskom units still down

“It seems that nothing can slow palladium,” said Daniel Briesemann, a Commerzbank analyst. “Even though we regard the steep price rise as exaggerated, there is no end in sight to the rally.”

Palladium’s gains on Thursday propelled it past gold’s 2011 record of $1 921.17 an ounce.

There’s a good chance that palladium will touch $2 020 before 2020, said Jonathan Butler, precious metals strategist at Mitsubishi Corp UK.

“South African electricity supply concerns have helped palladium this week, together with still strong physical demand,” he said.

Platinum also gained, with spot prices adding 0.6% by 8:17 am in New York.

Spot gold was little changed as investors weighed the Federal Reserve’s signal that it would keep interest rates on hold through 2020. Focus now turns to trade ahead of a Sunday deadline for more US tariffs on Chinese goods, as well as U.K. elections on Thursday.

© 2019 Bloomberg L.P.

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