The price of the most expensive metal in the world has become even higher amid the mounting demand. Last month, palladium closed at a record high, exceeding the reading of $3,020 per troy ounce.
As a result, the price gap between palladium and gold increased by more than $1,000. It seems that it is not the limit as the gap may widen even more amid the global economic recovery.
Even now, the market may face a shortage of palladium. This could be caused by the rising needs of the car production sector and a stricter environment control. What is more, the price of the metal is influenced by the difficulties with supply amid the production suspension at the mines of Norilsk Nickel, the largest producer.
Notably, palladium is used in electronics, dentistry, and jewelry, but the main field of application is the production of automotive catalysts in gasoline engines. Catalysts are needed to reduce the level of toxic emissions into the atmosphere. This issue is becoming extremely important due to the shift towards a green economy.
At the same time, gold is likely to go on losing value. Georgette Boele, precious metals strategist at ABN AMRO Group Economics, said that by the end of the year, gold might depreciate to $1,700 per troy ounce. However, there is an alternative scenario. Demand for gold may surge amid the reform of the Russian National Wealth Fund. It is quite possible that the share of gold in the fund will rise due to the removal of the US dollar.
