Palladium rose to a two-month high in London on speculation rising car sales will boost demand for the metal used in pollution control gear. Gold was little changed. Palladium is extending its 13 percent rally last week, the most since October 2008, after four of the six largest carmakers by U.S. sales beat expectations in November. Prices slipped to a seven-week low on Nov. 28 as exchange-traded product holdings slumped 22 percent this year. European equities gained today amid speculation European leaders will agree on enhanced bailout measures for indebted nations at a summit this week. “You have better U.S. auto sales data,� which is supporting prices, said Bayram Dincer, an analyst at LGT Capital Management in Pfaeffikon, Switzerland. “It looks like a strong liquidation and selling force pressured the market in November, and now it’s catching up again.� Palladium for immediate delivery gained as much as $18.25, or 2.7 percent, to $688.50 an ounce, the highest price since Sept. 22. It was at $676.75 at 11:05 a.m. in London. Palladium futures for March delivery on the New York Mercantile Exchange were up 1.1 percent at $678, an eighth consecutive increase. The metal dropped 16 percent this year and ETP assets slid to 53.3 metric tons on concern that slowing economic growth will curb consumption. Car sales will rise 6.5 percent to a record 79.5 million cars and light commercial vehicles in 2012, according to LMC Automotive Ltd., a research company in Oxford, England. Barclays Capital anticipates a shortage of 272,000 ounces next year, compared with a surplus of 760,000 ounces in 2011, as demand from automakers gains 5.3 percent. Auto Sales “More positive economic indicators and auto sales from the U.S. may help push palladium toward $740,� which would be the highest in almost three months, James Moore, an analyst at TheBullionDesk.com in London, wrote today in a report. “Gold for the moment appears comfortable holding ground between $1,700 an ounce and $1,755.� Immediate-delivery bullion fell $1.15, or 0.1 percent, to $1,727.05 an ounce in London. The precious metal for February delivery was little changed at $1,730.60 on the Comex in New York. Bullion is in the 11th year of a bull market and prices reached a record $1,921.15 an ounce on Sept. 6 as investors sought to diversify away from equities and some currencies. Holdings in gold-backed ETPs gained 3.8 tons to an all-time high of 2,358.2 tons yesterday, data compiled by Bloomberg show. Gold’s 22 percent gain this year has pushed its premium to platinum to 13.3 percent. The premium was at 13.4 percent yesterday, the most since at least 1987, data compiled by Bloomberg based on closing prices show. Platinum for immediate delivery, also used in auto catalyst devices, was little changed at $1,523.75 an ounce. Silver was down 0.7 percent at $32.5475 an ounce. To contact the reporter on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net

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