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Palladium Soars to All-Time High; Gold ETFs Shine on Demand for Precious Metals

This article was originally published on ETFTrends.com.

U.S. equities weren't the only assets shining on Wednesday as increasing demand for precious metals like palladium and gold propped up ETFs like the  Aberdeen Standard Phys PalladiumShrs ETF (PALL)  and the SPDR Gold Shares (GLD).

Palladium soared to an all-time high of $1,358 an ounce. As of 3:00 p.m. ET, the price went even further to $1,364.80.

Palladium, Gold ETFs Shine on Increasing Demand for Precious Metals 1

"In the long run, we believe that palladium will continue to benefit from exceptionally strong supply/demand, resulting in yet higher prices," said George Gero, managing director at RBC Wealth Management. "However, in the near future, we believe that palladium is due a correction."

PALL rose 2.47 percent while GLD gained 0.33 percent. PALL is trading well above its 200-day moving average as the price of palladium bested gold for the first time in 16 years during the month of December.

Palladium, Gold ETFs Shine on Increasing Demand for Precious Metals 1

Gold Gains on Global Growth Concerns

A strong U.S. dollar has stymied gold for much of 2018, but global growth concerns and other broad market worries could give the precious metal a boost in 2019. A confluence of the aforementioned market worries could trigger gold prices as investors seek to the precious metal for safe haven options.

After four rate hikes in 2018, the Federal Reserve pausing interest rates in 2019 could also result in a weaker dollar and stronger demand for gold. On Wednesday, gold closed in on a key $1,300 price resistance level, reaching $1,296.30.

"Right now, there is a lot of insecurity about the stock markets, global economy and trade," said Miguel Perez-Santalla, vice president of Heraeus Metal Management in New York.

"These concerns are holding gold up and one wrong move can pop gold up above the $1,300 level."

Strong Dollar Stymies Gold as Markets Contemplate Rate Pause 1

Last week, inflation data met expectations, which kept the U.S. dollar in check and allowed gold to advance slightly. The consumer price index for December came in line with expectations--down 0.1 percent from November and up 1.9 percent, year-on-year--marking the first decline in nine months.

Despite all the headwinds gold has had to face in 2018, some analysts feel that the precious metal has weathered the storm and offers a prime buying opportunity for investors in 2019.

"The macro environment still looks very positive for gold, given we expect the dollar to weaken and the Fed unlikely to start hiking rates until the second half of the year," said Suki Cooper, precious metals analyst at Standard Chartered Bank.

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