“Investors are buying palladium at the fastest pace in more than a year as analysts predict rising demand and declining supply will turn this quarter’s worst- performing precious metal into the best by December.
Holdings in palladium-backed exchange-traded products rose 14 percent this year, poised for the best quarter since the end of 2010, data compiled by Bloomberg show. The metal will average $850 an ounce in the final three months of 2012, 31 percent more than now, according to the median estimate of 11 analysts surveyed by Bloomberg. They expect a gain of 15 percent for gold, 13 percent for silver and 10 percent for platinum.
Palladium lagged behind other metals this year on concern about slowing growth in vehicle sales in China, the world’s largest car market. Autocatalysts account for 65 percent of demand, according to Barclays Capital. Prices are poised to rise because carmakers are still using the most metal ever, with the prospect of shortages because of less supply from state reserves in Russia, the biggest producer, the bank estimates.
“I like palladium the best among precious metals, it’s relatively cheap compared to the others,” said Bart Melek, the head of commodity strategy at TD Securities Inc. in Toronto and the most accurate price forecaster tracked by Bloomberg Rankings in the eight quarters through the end of 2011. “Autocatalyst demand for palladium should grow. Russian government stocks will limit supply growth.”
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WITE. The white metals basket. That’s my play. Bought it 10 days or so ago, as noted in the PPT.