Palladium and platinum better leveraged to recovery than gold – Deutsche Bank

From a high-level perspective on market structure, palladium and platinum are more akin to traditional commodities than gold and silver, although they may sometimes be mentioned in the same breath. In the coming months, economists at Deutsche Bank prefer a long palladium and platinum basket vs gold. 

See – Gold Price Analysis: XAU/USD to test $1,900 amid data disappointments – TDS

Gold investor exuberance is insufficient to re-inflate premium to fair value

“An easing of semiconductor shortages triggering auto plant shutdowns would be helpful for both palladium and platinum, but more so for palladium. Platinum's dependence on investment and jewelry demand is less helpful as these categories in aggregate may be relatively unchanged year on year – a slowdown in ETF accumulation and recovery in Chinese jewelry demand offset one another.”

“Positive US fixed income dynamics for gold begin with stronger inflation prints, an unbroken trend in higher inflation expectations, and a wide US employment gap. The result has been a faltering sell-off in Treasuries, and a resumed decline in real interest rates, a repeat of one of gold's key positive drivers in 2020 (and January 2021). While gold thereby derives short-term support, we think it has limited room to run.”

“Speculative demand is unlikely to inflate the gold premium to fair value nearly as dramatically as in 2020, and may well turn lower again with taper chances rising in Q3.”

“We prefer a long palladium-platinum basket over gold.”