Palladium made a monster move up on Friday, almost 6.5%. We have seen gold lead the way, then platinum, and finally silver this past week. It appears that the precious metal complex is firmly on the radar of people and institutions with deep pockets.
The move in gold was clearly driven by massive central bank buying. One can only speculate as to why the other three have been taking off. Perhaps it is a rush to real assets less expensive than gold.
Another possibility could be that the breakdown of the global supply chain is causing uncertainty for purchasing managers turning into fear that key industrial components might not be available. If the current supply/demand situation were not enough of a challenge, Toyota is focused on a promising fuel cell technology that would require a lot more platinum for example.
In a recent interview with Quoth the Raven, David Collum said that the above ground supply of platinum is one year! Silver has been in supply deficit for years, and that is only going to get worse as inventories approach historic lows.
For industries using these metals, there are generally no alternatives. So if your job security depends upon acquiring key components for your business, you must acquire the materials no matter what the price.
Finally, the key suppliers of platinum and palladium are Russia and South Africa. Tariffs and sanctions are another wild card.
How high can palladium go? Currently a bit north of $1,200, it peaked around $3,100 three years ago.
Hang onto your hat!
Maybe someone got cold fusion working and only the inner circle knows about it so far.