Palladium Price Slumps for Third Day as Gold Trades Near Six-Week High
Johannesburg-S.A. (Aug 25) Palladium fell to the lowest in almost five years amid concern that China’s economic slowdown will reduce demand for the metal used in car parts. Gold was near a six-week high as equities rebounded and the dollar strengthened.
Palladium futures dropped as much as 8.2 percent to $528.20 an ounce, the lowest since September 2010. The metal pared losses, trading down 3.1 percent as of 9:03 a.m. on the Comex in New York. Gold for delivery in December slipped 0.3 percent to $1,150.40 an ounce.
“It looks like these markets are really being driven by sentiment and macroeconomic developments, rather than anything to do with the fundamentals of the metals,” David Jollie, head of research at Mitsui & Co Precious Metals Inc. in London, said by phone Tuesday.
Imports of palladium, used in catalytic converters for cars, plunged 42 percent to 1.27 metric tons in July from a year earlier, according to Chinese customs data released earlier this month. Chinese consumers bought the fewest passenger vehicles in 17 months in July.
Risk appetite made a comeback following the selloff on Monday that erased $2.7 trillion from the value of global equities. Stocks, commodities and emerging-market currencies extended gains after China cut its benchmark lending rate for the fifth time since November and lowered the amount of cash banks must set aside.
Gold for immediate delivery slid 0.5 percent in London, according to Bloomberg generic pricing. Silver futures were little changed, while platinum rose 0.2 percent to $993.90 an ounce.