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(Kitco News) - Rhodium prices have skyrocketed, which analysts and traders are attributing to strong industrial demand – particularly from the Chinese car market – at a time when supplies are unable to keep pace.
Further, rhodium is one of the smallest metals markets, meaning huge spreads right now between “bid” and “ask” prices in limited trading conditions.
Rhodium has already risen by around one-third in the first five trading days of the new year, with prices last trading around $7,300 an ounce. Some commodity analysts and traders say that the 2008 record high near $10,000 is the new target to watch, and prices could remain at historically higher levels even when they do finally correct.
“Everyone needs this metal, and we are seeing speculators now entering the market,” said Jonathan Butler, precious-metals analyst and head of business development at Mitsubishi. “This has all the makings of a squeeze, and who knows where it will end.”