Palladium, Platinum Surge On Data, Recovery Hopes

CONSELLA A. LEE

NEW YORK (AP) — Palladium and platinum surged Wednesday to their highest levels in about two years on a report of rising Chinese imports. Increasing optimism about a stronger economic recovery, including higher demand in the U.S. automotive sector, also fed the buying.

Analysts said a Barclays Capital report of growing demand for the industrial metals in China sent palladium and platinum prices sharply higher. The two metals, which are used in a variety of industrial products including catalytic converters in cars and trucks, led a broad rally in commodities.

Rising U.S. car sales also contributed to the rally, analysts said. Most car makers in March posted double-digit sales gains.

"What you're seeing is very significant demand in the precious metals group," said Dave Meger, vice president of metals trading at Vision Financial Markets. "China continues to have a voracious appetite for anything in metals and palladium and platinum are no exceptions."

Palladium is also used in electronics and fuel cells, while platinum is used in jewelry.

Palladium for June delivery rose $16.85 to settle at $568.25 an ounce on the New York Mercantile Exchange. That is the metal's highest close since March 2008.

Platinum for July delivery increase $18.50 to settle at $1,740.30 an ounce on the Nymex for its highest close since August 2008.

Silver, which is used in a variety of products such as jewelry, batteries and electronics, also tends to benefit when industrial metals rise.

May silver gained 25.7 cents to settle at $18.08 an ounce while May copper added 2.2 cents at $3.5350 a pound. Gold for June delivery gained $9.60 and settled at $1,148.80 an ounce. Both metals are also traded on the Nymex.

Meanwhile, oil prices fell below $84 a barrel after the government said U.S. oil and gas supplies grew more than expected last week. Benchmark crude for June delivery gave up 17 cents to settle at $83.68 a barrel on the Nymex.