By Ira Iosebashvili

Palladium prices rose to their highest level in 17 months Tuesday, spurred by expectations of economic growth in the U.S. and China.

Palladium for December closed up 2.4% at $744.25 a troy ounce, the highest point since June 2015. Prices are up 20% this month.

Although classified as a precious metal, palladium sees heavy industrial use as a key component in auto exhaust filters for gasoline-powered U.S. and Chinese cars. Investors have piled into the metal in the weeks following U.S. elections, expecting that infrastructure spending and tax cuts under the new presidential administration will spur the economy and boost auto demand.

At the same time, investorsbelieve that stimulus efforts in China may have finally found their mark, sparking car sales there.

Industrial buyers may have been surprised by recent robust data out of both markets, forcing them to restock their supplies of the metal at a faster pace, said Bart Melek, head of commodities strategy at TD Securities.

A tight supply picture is also boosting prices, Mr. Melek said. The palladium market will post a deficit of 651,000 troy ounces this year and another shortfall in 2017 thanks to rising autocatalyst demand, according to metals trader Johnson Matthey PLC.

By contrast, prices for platinum have struggled. The metal is used in European cars, and has demand had suffered from the region's lackluster economy and doubts about the demand for diesel-powered vehicles.

Platinum for January delivery was settled up 0.7% at $943 a troy ounce. Prices are down more than 4% in November.

Gold for December delivery rose 0.1% to $1,211.20 a troy ounce. December silver rose 0.7% to $16.63 a troy ounce.

Write to Ira Iosebashvili at ira.iosebashvili@wsj.com

(END) Dow Jones Newswires

November 22, 2016 15:03 ET (20:03 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.