(Bloomberg) -- Palladium is starting 2017 in a cheery mood, with the best performance among precious metals.
The metal headed for its biggest two-day gain since August 2015, rising 8.3 percent on bets demand from carmakers will grow after improving manufacturing data in the U.S. and China. General Motors Co.'s December deliveries beat forecasts while Ford Motor Co. and Nissan Motor Co. posted surprise gains. Gold rallied as the dollar weakened.
Palladium for immediate delivery delivery soared 21 percent last year, outpacing gains in platinum, silver and gold. The metal, used to reduce dangerous engine-exhaust gases, is the most industrial of the four and has been buoyed by demand from the world's two largest economies.
“Demand is outstripping supply,” said Peter Thomas, a senior vice president at Zaner Group LLC in Chicago. “Recent car sales figures have been monstrous -- that's a reflection of demand. The fundamentals are driving the market.”
The metal traded at $739.08 an ounce by 1:42 p.m. in New York, up 4.3 percent, after rising 4 percent on Tuesday, according to Bloomberg generic pricing. Palladium futures for March delivery rose 4.1 percent to settle at $738.80 an ounce at 1:14 p.m. on the New York Mercantile Exchange.
Precious metals gained on a weaker U.S. currency, with the Bloomberg Dollar Spot Index slipping 0.4 percent against major peers. Spot gold was up 0.5 percent at $1,164.43 an ounce, while silver gained 1.1 percent to $16.4766 an ounce. Platinum rose 0.9 percent to $945.10 an ounce.
On Tuesday, data showed U.S. manufacturing expanded in December at the fastest pace in two years, while Chinese manufacturing closed the year on a relatively robust note.
“Palladium is resuming last year's rally, which was interrupted by a sell-off in December,” said Georgette Boele, a currency and commodity strategist at ABN Amro NV in Amsterdam. “A combination of dip buying, stronger data and constructive sentiment on the precious metals is helping prices.”
Gold holdings in exchange-traded funds declined for a second day, slipping 0.2 percent to 1,772.5 metric tons, according to data compiled by Bloomberg as of Tuesday.
To contact the reporters on this story: Eddie van der Walt in London at evanderwalt@bloomberg.net, Susanne Barton in New York at swalker33@bloomberg.net. To contact the editors responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net, Joe Richter
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
