Palladium Price Plunges On China Car Sales
New York (May 11) Palladium prices declined Monday after passenger-car sales in China recorded their weakest gain in more than two years, adding to concerns over China’s cooling economy.
Palladium for June delivery, the most actively traded contract, was recently down $15.40, or 1.9%, at $786.95 a troy ounce on the Comex division of the New York Mercantile Exchange.
The metal is used in the catalytic converters to clean automobile emissions. A government-backed industry group on Monday reported that China sold 1.67 million passenger vehicles in April, up 3.7% from a year earlier. The growth was slowest since February 2013, according to China Association of Automobile Manufacturers, raising investors’ concerns about a key market for the metal.
The car-sales data came amid concerns over the broader slowdown in the world’s second-largest economy, which grew 7% in the first quarter of this year, one of the lowest rates in a decade. With the hope of resuscitating growth, China said Sunday it would cut benchmark interest rates for the third time in six months.
However, precious metals were little moved by China’s rate action. “It’s already priced in,” said Bill Baruch, senior market strategist at ii Trader. “Chinese data has been really poor, really calling for a rate cut at some point. The wild card is whether they would follow this up with another rate cut in the near future, then the metals will respond.”
In other precious-metal markets, gold and silver were little changed, largely pressured by a stronger dollar. Dollar-denominated commodities become more expensive to foreign buyers when the buck strengthens against their home currency.
Gold for June delivery, the most actively traded contract, was unchanged at $1,188.90 a troy ounce on the Comex division of the New York Mercantile Exchange. Silver prices for July delivery rose 0.2% to $16.495 a troy ounce.