Hmm… This is the first I heard of a developing PM shortage and possible panic buying. Don’t know if it holds water or not, but it might. The following excepts are from an article by Money Metals titled “Silver Investors see Palladium as the Canary in the Coal Mine.” (I just took the more relevant bits)

>> The bullion banks’ problem is starting to look serious.
For one thing, the lease rates for palladium have gone berserk.
Until very recently, they (bullion bankers) could get that metal for less than one percent cost. Last week, that rate spiked to 22%.
The only reason a banker might pay such a rate is because he is over the barrel and has zero options outside of defaulting on his obligation.
Investors are paying big premiums (about $100/oz currently) to get contacts with offering metal for delivery now. The near-term price reflects a concern over whether promises to deliver palladium months from now can even be met.
Gold and silver bugs have long expected the bullion bankers will eventually put themselves in this kind of bind with the monetary metals. They have sold contracts representing something on the order of 100 ounces for every ounce of actual gold or silver sitting in exchange vaults.

That much leverage is bound to end in catastrophe, someday. All it will take is a collapse in confidence – the suspicion that paper will not and cannot be convertible for actual metal.

A failure to deliver in the relatively tiny palladium market could be the “canary in the coal mine” – a warning to investors in other precious metals. If there is a failure to deliver in LBMA palladium, it could shake confidence in the much larger markets for gold and silver.

The developing shortage in the silver market suggests that silver could be the next situation, followed by gold. <<

http://www.marketoracle.co.uk/Article63740.html

From SF – Of course Money Metals is biased – they sell the stuff. Just the same, got Phys?