NEW YORK (Scrap Register): Commerzbank forecast that palladium will average $1,010 an ounce in 2018 and platinum will average $975. The palladium average was put at $1,025 in the first two quarters and $1,000 in the final two.
Platinum is seen showing more improvement over the course of the year, with an average first-quarter average forecast of $925 and an average of $1,000 in the fourth quarter.
Both metals are used in auto catalysts, with palladium underpinned in 2017 since it goes into the gasoline-powered cars that make up the world’s two largest auto markets – the U.S. and China.
“After soaring by approx. 50% to a 17-year high this year, we believe that the upside potential for the palladium price is largely used up,” Commerzbank said.
“Though a further rise cannot be ruled out in the short term, the substitution [toward platinum] debate is likely to put the brakes on the high-flying prices. What is more, car sales in the U.S. and China are hardly likely to maintain their high level of recent months,” the bank added.
Meanwhile, platinum should follow gold higher. As we envisage a rising gold price, platinum should also make gains – though the fundamental data mean that platinum is hardly likely to develop any intrinsic strength,” Commerzbank added.