Good Morning,

Gold prices remained near their seven-week highs around the $930 area overnight and were once again characterized by more of an economic recovery anticipation buying motivation and less of a safe-haven oriented one. Various green shoots were seen shooting up in different parts of the world and encouraging commodities-related uptake. This morning, the US dollar was steady at 83 on the index, while oil gained $1.19 to $57.53 despite projections that gasoline prices are set to fall by 20% by the start of the US 'driving season' on Memorial Day.

New York spot bullion trading opened the new week with mixed results this morning; gold was off by $1.50 at $929.40, and silver fell 12 cents to $13.83 per ounce. However, the noble metals were rising slightly, with platinum adding $4 to $1105 and palladium gaining $1 to $224 an ounce. No concrete news came from the automotive sector as far as the fates of GM or Chrysler were concerned. VW however scuttled merger talks with Porsche amid conditions that the parties deemed 'not constructive.' Nice euphemism.

It is, in fact, safe to say that a great deal of gold's most recent two-week long gains were part of the relatively lavish attention that commodity mutual funds have paid to these markets of late. In clearly related developments, the Bloomberg Professional Confidence Index climbed sharply in May, and so did inflows into commodity mutual funds. Raw-material funds have siphoned nearly $5 billion in investments thus far this year, while the commodities sector has gained nearly 5% on the year as of last week.

More budding branches were spotted in Japan, where consumer confidence rose for a fourth month and beat analysts' expectations. British home sellers stood firm on asking prices and raised them a bit, in a possible signal that the mortgage lending chokehold might be easing.

Where these shoots look like they might still be the subject of a late spring freeze, measures are being taken in advance. China said it will stand ready to inject whatever adrenaline is required if the economy should show signs of slowing. The country maintains that it will be able to pull out of its recent dive with an 8 percent growth rate in 2009.

Finally, one can wonder if the $12.2 million that a 1957 Ferrari Testarossa fetched at auction (the highest ever price for such an object) is a sign of a fatal disconnect between reality and perception, or another sign that whatever this crisis has undermined, it has done so in localized pockets, while the house of cards has not only held together but is showing signs of adding another level to the deck.

Speaking of four-wheeled conveyances, there are still many men and women in white coats toiling away at figuring out how to get the planet's vital atmospheric shield and fast-melting ice caps to make it to the next century without being in crisis mode. Their efforts involve the use of some of our perennial favorites: palladium and gold. reports (and we thank a loyal Vancouver reader for the submission) that:

Material scientists at Washington University in St. Louis have developed a technique for a bimetallic fuel cell catalyst that is efficient, robust and two to five times more effective than commercial catalysts. The novel technique eventually will enable a cost effective fuel cell technology, which has been waiting in the wings for decades, and should give a boost for cleaner use of fuels worldwide.

Younan Xia, Ph.D., the James M. McKelvey Professor of Biomedical Engineering at Washington University led a team of scientists at Washington University and the Brookhaven National Laboratory in developing a bimetallic catalyst comprised of a palladium core or seed that supports dendritic platinum branches, or arms, that are fixed on the nanostructure, consisting of a nine nanometer core and seven nanometer platinum arms. They synthesized the catalysts by sequentially reducing precursor compounds to palladium and platinum with L-ascorbic acid (that is, Vitamin C) in an aqueous solution. The catalysts have a high surface area, invaluable for a number of applications besides in fuel cells, and are robust and stable.

Xia and his team tested how the catalysts performed in the oxygen reduction reaction process in a fuel cell, which determines how large a current will be generated in an electrochemical system similar to the cathode of a fuel cell. They found that their bimetallic nanodendrites, at room temperature, were two-and-a-half times more effective per platinum mass for this process than the state-of-the-art commercial platinum catalyst and five times more active than the other popular commercial catalyst. At 60 C(the typical operation temperature of a fuel cell), the performance almost meets the targets set by the U.S. Department of Energy.

The Department of Energy has estimated for widespread commercial success the loading of platinum catalysts in a fuel cell should be reduced by four times in order to slash the costs. The Washington University technique is expected to substantially reduce the loading of platinum, making a more robust catalyst that won't have to be replaced often, and making better use of a very limited and very expensive supply of platinum in the world. The study was published in Science online on May 14.

There are two ways to make a more effective catalyst, Xia says. One is to control the size, making it smaller, which gives the catalyst a higher specific surface area on a mass basis. Another is to change the arrangement of atoms on the surface. We did both. You can have a square or hexagonal arrangement for the surface atoms. We chose the hexagonal lattice because people have found that it's twice as good as the square one for the oxygen reduction reaction. We're excited by the technique, specifically with the performance of the new catalyst.

Xia says seeded growth has emerged recently as a good technique for precisely controlling the shape and composition of metallic nanostructures prepared in solutions. And it's the only technique that allowed Xia and his collaborators to come up with their unconventional shape.

When you have something this small, the atoms tend to aggregate and that can reduce the surface area,' Xia says. A key reason our technique works is the ability to keep the platinum arms fixed. They don't move around. This adds to their stability. We also make sure of the arrangement of atoms on each arm, so we increase the activity.

Xia and his collaborators are exploring the possibility of adding other noble metals such as gold to the bimetallic catalysts, making them trimetallic. Gold has been shown to oxidize carbon monoxide, making for even more robust catalysts that can resist the poisoning by carbon monoxide – a reduction byproduct of some fuels. Gold should make the catalysts more stable, durable and robust, giving yet another level of control, Xia says.

We have frequently opined that we look to technology -be it materials, energy production, food synthesis, or health-related breakthroughs- to come in and take the world by surprise just when things appears bleakest and bereft of solutions. To the extent that such achievements involve the use of precious metals, we are all the more excited.

We have also often said that the ideal increases in the value of gold, silver, palladium, etc. would be based on growing prosperity, an eco-conscious global economy, and new areas of usage. This, as opposed to the gloom/doom/bust scenarios with which (at least) gold is commonly associated. Parents, send your kids to science schools. You might just be doing your gold allocation a favor.

Happy Trading,