Platinum and palladium exchange-traded funds (ETFs) are set to be launched for the first time in the US today (8th January).

The products, which are known as ETFS Physical Platinum Shares PPLT and ETFS Physical Palladium Shares PALL, will commence trading on the NYSE Arca platform.

With demand for pgms from the auto sector - which uses them in catalytic converters - struggling in recent months, the move will provide a timely boost to the industry.

However, analysts have also explained that the products will draw extra attention to pgms in emerging countries where demand for vehicles is still improving.

"Everybody tends to rush into gold when they think of precious metals. PGMs have the added benefit of a high level of industrial input," Bill O'Neill, partner at New Jersey-based LOGIC Advisors, told Reuters.

"With the growth of car usage in India and China, demand for pgms should be quite buoyant. It's going to be a metal [group] that attracts a lot more attention in the future."

Since rumours that London-based firm ETF Securities was planning to trade the ETFs emerged last month, platinum and palladium have risen by seven per cent and 17 per cent respectively.

Furthermore, platinum reached a 16-month high this week ahead of the launch, while palladium jumped to its highest price since July 2008 as investors poured money into both metals.

"For the next two or three weeks at least following the launch, this should be quite bullish for prices of both metals," added Tom Kendall, Precious Metals Strategist at Mitsubishi Corporation, in an interview with Reuters.

"I have no doubt that platinum and palladium physically-backed ETF in the US will be a success."

Earlier this week, Susquehanna Capital Group announced it would be the first company to buy the two products, snapping up 100,000 shares in each.

Sources:

UPDATE 1-Palladium, platinum rally ahead of U.S. ETP launch (07/01/10)

UPDATE 3-U.S. platinum, palladium ETFs set to trade Friday (07/01/10)

Gold retreats, PGMs hit highs on ETF news (07/01/10)

New US platinum ETF attracts first buyer (06/01/10)

ETF Securities starts 2010 with the anticipated listing

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