Investors seem to have lost a bit of their appetite for gold and silver lately, but palladium, along with the exchange traded fund that follows palladium prices, have caught the attention of metals traders.
ETFS Physical Palladium Shares ETF (PALL) is up about 5% the past month. The fund recently crossed over its 50-day and 200-day exponential moving averages.
"We've seen a recovery in sentiment, good auto sales numbers coming out of the U.S. and of China, and that's helped, I think, investment demand for palladium," William Rhind, ETF Securities Managing Director, said on CNBC.
"We've seen throughout the first quarter a strong reversal in sentiment for palladium, primarily driven by the anticipated demand by Chinese and U.S. market for more gasoline-engine vehicles," Rhind noted in a separate CNBC piece.
Inflows into the palladium ETF show that investors are purchasing almost seven times as much palladium and platinum as gold in the first quarter, CNBC reported. Investors bought the equivalent of 197,000 ounces worth of palladium, compared to 34,000 ounces of gold.
"We feel it's primarily because investors are more confident about the economy generally, but are looking at other opportunities outside of gold within the precious metals," Rhind added.
However, it should be noted that investment demand in palladium only makes up 5% to 7% of the overall palladium price. Industrial demand is still the major factor, which makes palladium act more like a cyclical industrial metal.
ETFS Physical Palladium Shares ETF
Max Chen contributed to this article.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.