Platinum and palladium prices climbed to 18-month highs this week, boosted by demand from two newly launched ETFs.

The ETFS Platinum Trust (NYSE: PPLT) and ETFS Palladium Trust (NYSE: PALL) began trading on January 8 with much fanfare. And in the three weeks since their NYSE listing, both ETFs have witnessed large investments.

These ETFs — like many others — are backed by the physical metals. The platinum ETF currently holds 195,000 ounces; the palladium ETF holds 400,000 ounces. The metal currently held in the platinum ETF is worth over $300 million and is equal to over 11 times the world's daily platinum output.

Platinum for immediate delivery rose as much as $1,629 an ounce this week, while palladium peaked at $466 an ounce.

Platinum and palladium are mainly used in catalytic converters that lower pollution from combustion engines. Support for platinum and palladium demand is expected to be boosted by China, where up to 17.2 million cars are forecast to hit the road this year — a 26% increase from 2009.

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