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Palladium breaks the $1,800 barrier

By Lawrence Gash

Short supply and increased demand drive record price for precious metal

The price of palladium has reached record highs, breaking $1,800 (£1,400, €1,631) an ounce for the first time. The surge is driven by increasing demand from car manufacturers and a global supply shortage.

Palladium is used as a “white gold” alloy in jewelry and as part of dental amalgams in fillings and crowns. The majority of the world’s palladium, however, is used in the production of catalytic converters for cars.

Investors in the metal have benefited from the global push to reduce emissions. China announced in June that all cars built from 2020 must emit 30 per cent less carbon. So far this year the metal’s value has increased by about 43 per cent.

A global supply shortage also played its part. Palladium’s key deposits are found in South Africa, Russia, the US and Canada. As demand has outstripped supply, production in the Transvaal Basin in South Africa has been hampered by power outages.

Palladium’s costliness could drive auto-manufacturers to alternatives such as its cheaper sister metal, platinum. Tariffs imposed on both sides of the China-US trade war could cause it to plateau.

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