NEW YORK (Commodity Online): Palladium prices are on a high and as expected the metal is set to scale new heights as auto sales across the world showed signs of major recovery.

This week, palladium prices hit a two-year high by reaching $477 a troy ounce before easing back to $467.

Palladium prices have risen by a quarter since November as the Obama administration announced a car scrappage scheme.

The launch of palladium and platinum exchange traded funds in the US has also attracted fresh investor inflows for both metals.

Platinum and palladium led, used to make catalytic converters for automobiles, will witness a gain whenever auto sales shoot up.

Ford Motor Co said its US sales jumped 43 per cent in February, while General Motors reported an 11.5 per cent jump.

In another good news for palladium and platinum, In February India’s car sales surged by 33%. According to monthly data released by the Society of Indian Automobile Manufacturers (Siam), car sales in the domestic market stood at 1.53 lakh units in February against 1.15 lakh units in the same month last year.

The growth was evenly spread as 15 of the 16 carmakers that report monthly numbers to SIAM, including Maruti, Hyundai, Tata Motors and General Motors, reported healthy growth in demand. The sole loser was the Mahindra-Renault JV, which sells the Logan sedan, a model that has been rapidly losing volumes in the market and is confined to a few hundred units.

The rush for purchases in February was justified as the government increased excise duty by 2% in the Budget on February 26, leading to an immediate corresponding price hikes at the retail end.