Palladium hits 13-1/2-year high on supply fear; gold eases
New York (Aug 29) - Palladium rose to a 13-1/2-year high on Friday on worries over uncertain supplies from Russia, the world's largest producer of the metal, while gold prices eased on a dollar rise and gains in U.S. equities.
Tensions rose after Ukraine called for full membership in NATO, its strongest plea yet for Western military help after accusing Russia of sending in armoured columns that have driven back its forces in support of pro-Moscow rebels.
Supply of autocatalyst metal palladium from Russia is expected to fall 2 percent this year, GFMS analysts said, but the impact of potential sanctions over the Ukraine conflict is likely to be minimal. Russia accounted for more than 40 percent of supply last year.
Palladium prices rose 2.1 percent this week, despite a 5 percent weekly drop in the holdings in palladium exchange-traded funds.
"Investors have stepped in on declines to bring prices right
back up so far this year, and there is also a geopolitical
element to the palladium market as well," said James Steel,
chief metals analyst at HSBC.
Spot palladium was up 1.3 percent at $909.55 an ounce
by 2:42 p.m. EDT (1842 GMT), while the NYMEX palladium contract
for December delivery settled up $11.45 at $909.55 an
But big speculative long positions in U.S. palladium futures
and the sizable ETF outflow earlier this week suggested
investors could cut bullish bets, said Bart Melek, head of
commodity strategy at TD Securities.
Meanwhile, spot gold fell 0.3 percent to $1,286.35 an
ounce. U.S. COMEX gold futures for December delivery
settled down $3 an ounce at $1,287.40, with trading volume about
45 percent below its 30-day average, preliminary Reuters data
For the month, gold has posted a 0.3 percent gain on
lingering geopolitical tensions over Ukraine, Iraq and Gaza,
recovering after briefly falling to a two-month low at $1,273.06
On Friday, the S&P 500 equities index edged up as the
latest in a string of positive economic reports pushed investors
to extend a rally that was briefly threatened by overseas
The gold market largely ignored heightened tensions over
Ukraine, and Britain's raising of its international terrorism
threat level to the second-highest in response to possible
attacks being planned in Syria and Iraq.
Among other precious metals, silver was down 0.6
percent at $19.44 an ounce, while spot platinum edged off
0.3 percent to $1,416.40 an ounce.