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Why Palladium, and why now?

*The Wall Street Journal, by Rhiannon Hoyle, April 25, 2012

”The palladium market is revving up.

After lagging behind other precious metals for much of the year, prices for the white metal — a key element in cars’ catalytic converters — are pulling ahead.  Since the beginning of the month, palladium has risen almost 2%, hitting a one-month high on Friday.

That’s a reversal from the first quarter, when palladium fell 0.3%.

Now, investors are anticipating a squeeze — and higher prices — amid predictions that demand will outstrip supplies in 2012 following a hefty surplus last year.  Consumption is expected to rise because of a strong recovery in car sales in the U.S. and China.  Meanwhile, Russia has signaled it will scale back sales of palladium from its strategic stockpiles, which accounted for 9% of global supplies last year, according to estimates.

Those factors already are luring speculators back to the market, further curtailing the metal’s availability to industrial users.

‘It is the most attractive story’ among both precious and base metals, a category that includes copper and nickel, said Nikos Kavalis, a commodity strategist with the Royal Bank of Scotland.  While copper also tends to rise when manufacturing activity picks up, its price is weighed down by big inventories in China.

Palladium futures on Tuesday closed down 0.5%, to $665.15 an ounce.  RBS forecasts a surge in palladium prices to an average of $900 an ounce in the fourth quarter and $1,000 in 2013.”

*This information is solely a highlight of the opinion of a third-party publication and is incomplete.  Please subscribe to this publication for the full and timely opinion of the author and call a Monex Account Representative for any additional up-to-date information. This is not an offer to buy or sell precious metals. Investors should obtain advice based on their own individual circumstances and understand the risk before making any investment decision.

Aftershock Investor