Recently palladium hit its highest price per ounce in ten years, making both buyers and sellers wonder if the palladium price is going to once again reach its heady peak days when it sold for nearly $1100 dollars an ounce.

In January, 2001, palladium reached the heretofore unheard-of price of $1,090 an ounce. On the first day of trading for 2011 – January 3 – palladium reached a high of $801 an ounce. It was bid at a tad less than that – $800.97 an ounce at 11:18 S.A. time. The 2011 price represented an increase of $1.50 an ounce from the last day of trading in 2010, when the price reached $799.50 an ounce in New York.

The 2011 peak price was attributed to pent-up buying interest. With the increased emphasis on cleaner-burning automobile engines, car manufacturers will continue to require palladium, which is a key component in the manufacturing of catalytic converters. Thus it is anticipated that demand will be high for palladium in 2011 as automakers continue to try turning out “greener” products.

The 2000-2001 palladium price spike was marked by both increased demand and fears of shortages. In the mid-1990s palladium traded around $150 an ounce. 1997 saw a price rise in the metal, most likely because of its use in autocatalysts. In both 1998 and 1999 palladium spiked above $350 an ounce.

2000 was a most volatile year for palladium. At the beginning of the year it had reached $433 an ounce. Then Russian delivery problems sparked fears of a shortage, and the price jumped. By February 24 palladium was trading at $785 per ounce. Automakers, who had established their own stockpiles of the metal over the past years, began to draw on those supplies rather than pay the high cost.

Although exchanges, such as the Tokyo Commodities Exchange and the New York Merchantile Exchange, tried to take steps to keep the palladium price under control and prevent influential traders from suffering huge losses, high demand continued to nudge prices higher. When the Russian state treasury announced that no pgm would be sold in 2001 it set off fears of a shortage. After the Russian announcement the price spiked to its high of $1,090 an ounce in January, 2001 before retreating.

Now, with this new high price as the New Year begins, many are wondering if we’re not going to see a repeat of the 2000-2001 palladium price spike.