Palladium rose above $3,000 an ounce for the first time on Friday as the market worried about a shortage of the metal embedded by automakers in exhaust pipes to neutralise emissions.
Palladium was up 0.8% at $2,976.49 an ounce at 1010 GMT after reaching $3,007.73. Prices have shot up over 20% since March 16 when top producer, Russia's Nornickel announced that flooding at two of its mines would reduce output.
"Palladium has been in a structural deficit for 10 years. We have seen above ground inventories falling to very low levels," said UBS analyst Giovanni Staunovo. "(Palladium) can be very illiquid and this is making the moves even more crazy. This rally can continue, particularly if car sales start to improve," he said.
Demand from the auto industry is rising and expected to climb further as a semiconductor chip shortage that has curtailed production eases later this year.