Palladium prices jumped to 17-year peaks on Friday as strong demand from autocatalyst makers reinforced the prospects of market shortages, but slowing car sales are expected to challenge further gains.
Figures released Friday showed spot palladium was trading down 0.5% at $1,032.20 U.S. an ounce from an earlier $1,042.50 U.S., its highest since February 2001.
Analysts estimate about 80% of global palladium demand estimated at more than 10 million ounces next year will come from autocatalysts for gasoline powered cars, which many now prefer over diesel-fueled vehicles.
Palladium prices have doubled since January 2016 after Germany's Volkswagen in Sept. 2015 admitted it had used illegal software to cheat U.S. diesel emissions tests.
China's vehicle sales in the first 11 months of this year totaled 25.8 million units, up 3.6% from the same period in 2016, data from a local association showed.
Platinum, used in autocatalysts for diesel cars, was down 0.1% at $914.25 U.S. an ounce. Prices have more than halved since hitting a record above $2,200 U.S. an ounce in March 2008 and pushed the ratio of platinum to palladium prices to below one from above five.
Even without significant news to buoy it -- the excitement from the tax vote in the U.S. Congress starting to abate by Friday -- spot gold was up 0.1% at $1,268.10 an ounce, while U.S. gold futures gained 0.1% to $1,272.00.
Silver added 0.6% to $16.19 U.S. an ounce.
