Holdings in Platinum and Palladium Funds Drop on Emissions Troubles

Bloomberg recently reported that platinum and palladium funds saw a record drop on the back of concerns in the wake of the Volkswagen emissions scandal.
As quoted in the publication:

Platinum holdings in exchange-traded products slid 5.8 metric tons while those of palladium dropped 8.3 tons in October, the most since at least 2007, data compiled by Bloomberg show. Combined, the assets have slipped almost 10 percent since it emerged in September that Volkswagen had rigged diesel vehicles to help them pass emissions tests.
Both metals are mainly used to curb vehicle emissions, and investors may be concerned that carmakers will turn to alternative methods for reducing the gases, such as shifting to more battery-powered cars, according to Deutsche Bank AG. That would cut demand for platinum that’s mainly used in diesel engines and palladium that’s favored in gasoline types. Auto companies accounted for 45 percent of platinum demand and 80 percent of palladium consumption last year, Johnson Matthey Plc estimates.

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