Platinum is in a major upswing on the NYMEX Monday morning, and palladium is going along for the ride, as the two PGMs continue the rallies they started last week. Platinum has put gold in the shade and has widened its premium to the yellow metal by almost $350, despite platinum's woefully weak fundamentals.

 

So why are speculators buying platinum as though it's in short supply? According to trade sources, there have been reports that PGMs could play a major role in green technology -- particularly in cold fusion. In addition, investors are now of the belief that an economic recovery is not far off and demand for auto catalysts will improve.

 

Still, another theory is that PGM mining companies in South Africa could face a less friendly political climate under the new ANC leadership following the upcoming Presidential elections.

 

All of these fears make for an across-the-board rally for platinum and palladium. Platinum is up by $113.20 since the end of last month. Basis the NYMEX nearby July contract, platinum rose by $51.80 to $1,247.10/oz at 11:01 am. The spot month contract is up $52, trading at $1,242/oz. Following platinum's lead, the nearby June palladium contract is trading at $240.95/oz -- up by $9.85.

 

By comparison, gold is struggling to recoup some of its recent losses. Spot gold on the COMEX has rebounded to $897.30/oz -- up $15.10 for the day, so far. The more active June contract is up $15.40 at $898.70/oz.

 

Gold is being supported by the slightly weaker dollar, which is currently trading at $1.3317/euro and $1.4793/GBP. –Platts