LBMA mulls expanding to platinum and palladium, prices inch higher but still edgy on VW hit

The LBMA (London Bullion Market Association) the wholesale over-the-counter market for gold and silver bullion is in talks with the LPPM (London Platinum and Palladium Market) to form a new trade association for all four precious metals together with a new financial services provider.

It also sets good delivery and refining standards and serves as a point of contact for the regulatory authorities.

On the other hand platinum prices are at stake by diesel vehicles, as the European Automobile Manufacturers Association reported at the end of last week, 9.8% more new cars were registered in the EU in September than last year (1.36 million).

In other words, the VW emissions scandal has yet to have any impact on car registrations. Robust car sales mean solid demand for platinum and palladium because these metals are used for catalytic converters during car manufacturing.

Platinum prices have plunged since the Volkswagen scandal broke as investors have shifted into its sister metal palladium - with the latter's price rising 17%.

The adverse news caused a sharp divergence in sentiment towards the two metals. Platinum has dominated palladium in price terms for the last 11 years but for now platinum has been the worst-performing precious metal over the last month, as investors expect there will now be increased demand for petrol powered vehicles which needs palladium than platinum.