From here, analysts say holdings of palladium ETFs - popular investment vehicles which issue securities backed by physical metal - will probably climb further as investors seek exposure to this year's best-performing precious metal.
Palladium has outperformed platinum this year in rand and dollar terms. Earlier this month, it reached its most expensive level in comparison with its sister metal since mid-2002.
A member of the platinum group, palladium is used chiefly as a component in autocatalysts, primarily in the petrol engines favoured in the US and Chinese markets.
ETF holdings, as measured by Reuters, hit 2.271 million ounces on Friday, beating the previous all-time high from 2011 of 2.269 million ounces, after a near-8 000-ounce inflow into
AfricaPalladium and a second fund,
"We've seen half a million ounces go into the ETFs so far - that's in less than two months," Mitsubishi analyst
"Our basic assumption this year is that we'll see further growth.
"In the short term, for the remainder of this year, we expect it to be a strong element of demand, and to push the palladium market even further into deficit."
The two funds hold 568 000 ounces of palladium. Those inflows, along with supply concerns from number one producer
They are trading just below that high, at
Unlike other precious metals palladium has historically been little used as an investment vehicle.
Investment accounted for only 38 000 ounces of palladium demand last year, according to analysts at Thomson Reuters.
The popularity of the palladium ETFs suggests this is changing. - Reuters
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