Palladium Drops Most Since February in London as Investors May Prefer Gold
May 6 (Bloomberg) -- David Tice, chief portfolio strategist for bear markets at Federated Investors Inc., talks with Bloomberg's Susan Li about the outlook for U.S. stocks and his investment strategy. (Source: Bloomberg)
Palladium fell the most in three months and platinum dropped to its lowest price in five weeks on speculation investors will favor gold as an alternative to currencies.
Assets slid 4.8 percent last week in palladium exchange- traded products of ETF Securities Ltd. in Zurich and London while climbing 1.2 percent for gold, data compiled by Bloomberg shows. Palladium, a platinum-group metal, has risen every month since December 2008 on prospects for stronger demand from carmakers, which use it to curb exhaust fumes.
“The upside possibility has gone out the window,” said Rory McVeigh, senior platinum-group-metals trader in Luxembourg for Commerzbank AG. “For the time being, people are moving away from the platinum-group metals and a little bit toward gold.”
Palladium for immediate delivery declined as much as $33.60, or 6.5 percent, to $484.40 an ounce, sliding the most since Feb. 5, and was at $505.15 at 4:12 p.m. London time. Platinum fell as much as $44.40, or 2.7 percent, to $1,624.60 an ounce, the lowest level since March 31.
Palladium dropped 8.2 percent in the past four sessions and platinum fell 4.8 percent. Gold rose 0.4 percent in that span and today climbed to records in euros and Swiss francs.
The Reuters/Jefferies CRB Index of 19 raw materials declined as much as 1.9 percent on speculation Greece’s budget deficit will spur investors to shun other government debt in Europe and undermine economic recovery.
Europe accounted for 28 percent of auto catalyst demand for palladium last year and 46 percent of auto catalyst demand for platinum, according to London-based research company GFMS Ltd.
To contact the reporter on this story: Claudia Carpenter in London at ccarpenter2@bloomberg.net
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