Some Investors Pull out of the Palladium ETF
New York (Mar 24) With the strong dollar plaguing prices for some precious metals, it is not surprising that investors are parting ways with some exchange traded funds backed by physical holdings of gold, silver and related fare.
Palladium ETFs, including the ETFS Physical Palladium Shares (NYSEArca: PALL), have not been immune to that trend.
“Palladium-backed exchange-traded funds saw their biggest weekly outflows since August last week. Palladium ETFs, popular investment vehicles which issue securities backed by physical metal, saw outflows of nearly 50,000 ounces in the week to Friday,” according to Reuters.
Year-to-date, PALL is off nearly 3% compared to a modest gain for the SPDR Gold Shares (NYSEArca: GLD) and investors have pulled $26.7 million from palladium ETF. That after PALL was by far the best performer of the physically-backed precious metals ETFs in the U.S. last year.
Bolstered by strong auto sales and labor strife in South Africa, the world’s second-largest palladium-producing country, PALL jumped 11.3% last year even as the dollar climbed. [Palladium ETF can Keep Shining]
Catalysts remain that could lift PALL, particularly if the dollar retreats. According to Swiss trade data, Russian exports of palladium to Switzerland in January jumped to their highest since May 2014, but the pick up is not too surprising and won’t likely change the large deficit in supply this year, reports Ian Walker for Bulliondesk. Barclays expects a palladium supply deficit of 558,000 ounces this year.
Fueling the growing deficit, demand has picked up on increased automobile sales – palladium is a key component in catalytic converters used to diminish harmful emissions. [Palladium ETF to Enjoy Another Year of Strong Fundamentals]
Bolstering U.S. auto sales, near-zero interest rates, a stronger job market and cheap fuel costs are allowing American consumers to finally purchase some big-ticket items that they pushed off in the wake of the financial crisis.
PALL resides 5.1% below its 200-day moving average and 1.8% below its 50-day line.