Gold may be the best known precious metal, and it's currently selling for about $1,490 an ounce. But it's now in the rearview mirror of a different, lesser-known precious metal: palladium. About a year ago, palladium was selling at about $900 an ounce, notes Bloomberg. Today? More than $1,800, a threshold it recently cracked for the first time, reports CNBC. As the Wall Street Journal explains, the soaring price can largely be chalked up to tighter emissions rules for gas-powered vehicles in China and Europe. Palladium is used mainly to build catalytic converters, which make exhaust systems burn cleaner. And what's happening appears to be a straightforward case of supply not keeping up with demand.
In its primer on the metal, Bloomberg notes that palladium is not mined directly. Instead, it emerges as a byproduct in the mining of platinum and nickel, mostly in South Africa and Russia. For years, the auto industry has been talking about finding a cheaper alternative, but so far none has emerged. Don't expect that to change: At this point, automakers seem more likely to put their R&D money into electrification—which would make palladium exhaust systems obsolete—than into a palladium alternative. In the meantime, investors are enjoying the run: Demand outpaced supply in 2018 for the sixth consecutive year, and the Journal notes that palladium is one of the best-performing market assets in 2019. (Read more palladium stories.)