Auto manufacturers use platinum and palladium for catalytic converters, the Wall Street Journal reports. Those converters are more colloquially known as exhaust filters. Demand for palladium and platinum is expected to rise as Japanese automakers bounce back to full production following the March 11 earthquake and ensuing tsunami that saw production disrupted.
"Investors are not realizing the fact that these are sort of double investments," George Gero, vice president of RBC Capital Markets Global Futures, told Barrons. "They benefit from an industrial recovery and interest in precious metals."
Gold, silver, platinum and palladium all have uses in jewelry and for investment purposes but the manufacturer demand for platinum and palladium makes them more valuable.
Also working in favor of palladium and platinum is a growing skepticism of the two traditional precious metals: silver demonstrated just last month how volatile it is by losing more than 20 percent of its value while gold's 10-year bubble is believed by some to be prepping to burst.
On Wednesday morning, July-delivery platinum was $1,832.50 per troy ounce. September-delivery palladium was $784.15 per troy ounce.
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