Source: Forex News
Yesterday was an historic day for precious metal traders. This is because palladium passed gold to become the world’s most precious metal, a move that has not been seen in more than 15 years. The move came after a major rally in the price of palladium that started in October when its price reached a low of $850 a ounce. Since then, the price has gained by more than 50%. If it ends the year at these levels, it will be the second consecutive year as the best-performing metal.
Palladium is a member of the platinum group metals (PGMs). It is mined from deep the earth’s crust and is often found deeper than gold. The biggest exporters of the metal are South Africa and Russia. Because of its properties, the metal is used mostly in the automotive industry, where it is used as a catalytic converter. It is mostly used in diesel vehicles while platinum is used in the gasoline vehicles.
The reason for the rally is that there is an increased demand for diesel cars in Europe and in China. This is after the region passed new emission standards, which favored diesel-engine cars. The increased demand has met limited supplies for the metal.
Therefore, as the most expensive precious metal, there is a likelihood that a number of investors will start hoarding it. There is also a likelihood that most jewelry makers will start moving from gold to the metal. This is because buyers of premium jewelry tends to prefer the expensive metals. Therefore, this demand will likely continue to increase.
As of this writing, the price of palladium reached $1245 while gold is at $1230. The current price is above the 25-day EMA and all the other important moving averages. The RSI has moved to 61 after getting to a high of above 70 yesterday. Therefore, there is a likelihood that the XPD/USD pair will ease a bit as traders take profit. However, the upward momentum is likely to continue as more traders crowd the metal.
The post Palladium Dethrones Gold to Become Most Premium Precious Metal appeared first on Forex.Info.