Precious metals wrap: Palladium only gainer supported by auto demand outlook

Precious metals' response to the sharp slide in the dollar over the last week was mixed with only palladium ending with gains as the metal was also helped by better automotive demand outlook.

All metals, however, ended off the lows, despite some stronger than expected US data supporting the greenback late on Friday (17 April).

Gold ended at $1,203 from the previous week's close of $1,208, moving off an intra-week low of $1,183. The yellow metal snapped a four-week stretch of gains.

Silver closed the week's deals at $16.25 down from $16.46 at end of the previous Friday; it was a third straight week of losses for the metal. The white metal had fallen to a one-month low of $15.96 before rebounding towards the end of the week.

Platinum ended at $1,165, little changed from $1,167 on the week. The metal traded between $1,137 and $1,174.

Palladium, meanwhile, continued the upward trend of the previous two weeks and ended at a one-month high. The metal saw a range of $753 and $787 before closing the week at $779.

Palladium has been highly volatile of late. Moving off last September's record high of $911.60, the metal stuck to a range of about $100 wide from October.

It touched this year's high at $832.58 in the first week of January and fell to a low of $722 in about a month, which was a 14-month low. Palladium then showed some strength and over the past few days, the move was supported by the greenback's losses.

Demand scenario

Reports about the demand and supply outlook for the metal has been mixed so far but with the automotive industry set to continue its expansion this year, the metal is likely to firm up.

According to a Reuters poll published on 15 April, analysts have cut their average palladium forecast to $810 an ounce for 2015, from $845 in January. However, that is still above the current price.

Scotiabank said recently that global car sales would increase by 4% to a new record this year. It would lead to higher palladium demand as it is a key material for production of automotive catalysts.

Morgan Stanley has predicted an average price of $881 for the current year considering higher demand for the auto industry.