Dec. 7 (Bloomberg) -- Palladium futures rose, capping the longest rally since January 2007, on speculation that rising car sales will boost demand for the metal used in pollution-control devices in vehicles.
U.S. sales of light vehicles in November expanded at the fastest pace in more than two years. Global car and light-vehicle purchases will rise to a record in 2012, according to LMC Automotive Ltd., a research company in Oxford, England. Palladium prices rose for the eighth straight session, reaching a 10-week high. Last month, the metal dropped 5.9 percent.
“You have better U.S. auto sales data” supporting prices, said Bayram Dincer, an analyst at LGT Capital Management in Pfaeffikon, Switzerland. “It looks like a strong liquidation and selling force pressured the market in November, and now it’s catching up again.”
Palladium futures for March delivery gained 2.2 percent to close at $685.45 an ounce at 1:12 p.m. on the New York Mercantile Exchange. Earlier, the price reached $690, the highest for a most-active contract since Sept. 22.
Barclays Capital anticipates a shortfall of 272,000 ounces next year, compared with a surplus of 760,000 ounces in 2011, as demand from automakers gains 5.3 percent.
“More positive economic indicators and auto sales from the U.S. may help push palladium toward $740,” James Moore, an analyst at TheBullionDesk.com in London, said in a report.
Platinum futures for January delivery fell 0.1 percent to $1,522 an ounce. The price dropped for the fifth straight session, the longest slump in two months.
Palladium has declined 15 percent this year, and platinum is down 14 percent.
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