Palladium, once considered an unattractive by-product of platinum mining until the rise of catalytic converters in the 1970s, is hitting new records. Spot metal peaked at an all-time high of $1,344.41 a troy ounce on Wednesday. Over the past month, it has been more costly than gold, which has not happened since 2002. From a point a decade ago when an ounce of platinum bought you more than five ounces of palladium, it now buys you about 0.6 ounces.

You might think this spike will spark an immediate reversal and slump, as is often the case with commodity prices. That may not happen, though, because prices still are not high enough to prompt a supply surge. Palladium and platinum are part of an intertwined group of rare metals that occur in only three regions on the planet: Southern Africa, Siberia and, in smaller amounts, in the US and Canada. These platinum group metals crop up in the same deposits, so it is next to impossible to produce platinum without getting some palladium,...

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