Fears that the coronavirus could be a disaster for the global economy and a drumbeat of speculation over central-bank stimulus are driving another rally in precious metals.
Gold surpassed $1,600 an ounce this week and is closing in on a seven-year high.
Palladium rose as much as 8.4%, extending its record-breaking rally. The metal used to curb emissions from vehicles rallied as the Chinese government pledged to stabilize car demand in the Asian country. Efforts to contain the coronavirus earlier prompted manufacturing shutdowns.
Palladium generated the biggest return among the raw materials tracked by a DCI BNP Paribas gauge in the past two years as supply continues to trail consumption.
“There is nothing on the horizon to change the direction of these shortages,” Neal Froneman, the chief executive officer of Sibanye-Stillwater Ltd., said at a presentation in Johannesburg, referring to palladium and rhodium.
Stricter vehicle emissions standards are spurring more demand for the metals, which are used to clean car fumes, he said.
In China, the world’s largest auto market, areas with purchase limits should be encouraged to soften curbs by increasing car plate quotas, according to an article by President Xi Jinping published in Communist Party-run magazine Qiu Shi on Sunday.
(By Lynn Thomasson and Ranjeetha Pakiam)