“People are grasping for whatever ounces of material they can get” in the palladium market, Tai Wong, head of base and precious metals trading at BMO Capital Markets, said before Wednesday’s levels were hit. “It’s very expensive to borrow, and that is perhaps the biggest factor driving the spot price higher.”
Palladium for immediate delivery climbed as much as 1.7% to a peak of $1,252.68/oz, and was at $1,251.88/oz at 9.09am in London, according to Bloomberg pricing. Spot gold was 0.2% lower at $1,236.29/oz.
“The supply of palladium is very restricted,” Chirag Sheth, a consultant with London-based Metals Focus, said by phone from Mumbai. “The narrowing of the ratio is as much about the strong performance of palladium as about the poor performance of gold.”