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PRECIOUS-Palladium breaches $1,900 ceiling after South Africa outages

Published 11/12/2019, 06:22 am
© Reuters.  PRECIOUS-Palladium breaches $1,900 ceiling after South Africa outages
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(Updates prices)

* Palladium extends gains for 13th session

* Harmony Gold, Impala Platinum cut production at S. African mines

* GRAPHIC-2019 asset returns: http://tmsnrt.rs/2jvdmXl

By Karthika Suresh Namboothiri

Dec 10 (Reuters) - Palladium zoomed past $1,900 an ounce for the first time ever on Tuesday as a power crisis halted production at mines in major producer South Africa, exacerbating concerns over supply and extending the autocatalyst's record run.

Spot palladium XPD= was up 0.7% at $1,894.85 an ounce, as of 1:50 p.m. (1850 GMT), having earlier hit an all-time high of $1,903.

"South Africa produces 40% of world's palladium and the ESKOM outages are hitting some mines, giving palladium just that extra nudge above $1,900," said Tai Wong, head of base and precious metals derivatives trading at BMO.

"We've now had 13 consecutive positive sessions, which seems a little rich, so it wouldn't be surprising to see some consolidation, though the overall trend continues to look quite positive."

Mines across South Africa are shutting down after flash flooding caused the largest power blackouts in more than a decade, with major miners Harmony Gold HARJ.J , Impala Platinum IMPJ.J , and Sibanye-Stillwater SGLJ.J all being forced to cut production. concerns surrounding palladium have already helped the metal rise about 50% in 2019, owing to its large demand in the auto sector.

Other metals also gained on the outages in South Africa, with platinum XPT= up 2.3% at $915.53 an ounce, the highest since Nov. 22. Silver XAG= rose 0.4% to $16.66.

Gold got a further lift form uncertainties surrounding U.S.-China trade talks ahead of a Dec. 15 tariff deadline and a weaker dollar. USD/

Spot gold XAU= rose 0.1% to $1,463.88 per ounce. U.S. gold futures GCv1 settled up 0.2% at $1,468.10.

"Gold is riding higher on dollar weakness and caution ahead of a looming tariff deadline," said FXTM analyst Lukman Otunuga.

If Washington proceeds with the earmarked tariffs, gold could get a further boost, he added.

A Wall Street Journal report said trade negotiators from both sides were planning for a delay of the December tariffs. .N pared gains on the report, but remained supported as doubts over a phase-one deal persisted.

Markets also sought monetary outlook for 2020 by the U.S Federal Reserve, which is expected to keep rates unchanged at its two-day policy meeting ending Wednesday.

"In the short-term, if the Fed shifts to a more hawkish assessment, gold is at risk from further repositioning. Technically this could pull prices back to $1,410/oz," UBS analysts said in a note.

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https://tmsnrt.rs/2sctGlq

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