Join +750K new investors every month who copy stock picks from billionaire's portfoliosSign Up Free

PRECIOUS-Palladium eyes $1,500/oz in record surge; gold hits 10-mth high

Published 20/02/2019, 06:28 am
PRECIOUS-Palladium eyes $1,500/oz in record surge; gold hits 10-mth high
XAU/USD
-
XAG/USD
-
JMAT
-
GC
-
SI
-
PA
-
PL
-

(Updates prices)

* Palladium peaks at $1,491/oz, strongest on record

* Dollar slips on U.S-China trade optimism

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

By Arpan Varghese and Eileen Soreng

Feb 19 (Reuters) - Palladium scaled a record peak to within striking distance of the $1,500 level on Tuesday fuelled by a sharp supply deficit, while gold climbed 1 percent to hit a 10-month high on a weaker dollar and global growth jitters.

Spot palladium XPD= was 1.9 percent higher at $1,484 per ounce by 2:12 p.m. EST (1912 GMT), having earlier soared to an all-time high of $1,491.

A sustained deficit in supply was likely to widen this year as stricter emissions standards increase demand for catalytic converters, Britain-based autocatalyst manufacturer Johnson Matthey JMAT.L said last week. to an already strained supply scenario for palladium, was the likelihood of an improvement in demand from the auto sector, given the expectations of a U.S.-China trade deal materializing, said Bart Melek, head of commodity strategies at TD Securities in Toronto.

"If we were already high and tight when the demand environment didn't look all that promising, we are certainly going to get tighter when demand improves," he said.

A new round of trade talks between Washington and Beijing was scheduled for Tuesday. both platinum and palladium are primarily used by automakers in catalytic converters, platinum is more heavily used in diesel vehicles, which have fallen out of favour since Volkswagen's emissions-rigging scandal broke in 2015.

Unlike platinum, palladium has benefited from the switch away from diesel engines and expectations for growth in hybrid electric vehicles, which tend to be partly gasoline-powered.

This has helped cushion the metal from falling car sales globally. analysts said palladium has risen too fast too soon and was bound for a correction.

"Palladium is a bubble and is moving much above what fundamentals suggest," said Gianclaudio Torlizzi, managing director at consultancy T-Commodity in Milan.

Meanwhile, the dollar backed away from a two-month high hit last week on increasing optimism for a breakthrough in the trade talks, bolstering appeal for gold. USD/

Spot gold XAU= gained 1 percent to $1,339.50 per ounce, having earlier touched its highest since April 20 at $1,341.78. U.S. gold futures GCcv1 settled up 1.7 percent at $1,344.8.

"We are getting more evidence of slowing (global) growth," said SP Angel analyst Sergey Raevskiy.

"There were some dovish comments from Bank of Japan and the European Central Bank."

Dovish signals from Japan's central bank and the ECB compounded worries over a global slowdown, and followed weak data from the United States and China. investors will scan the minutes of the U.S. Federal Reserve's last policy meeting on Wednesday for more guidance on interest rate increases this year. Higher rates tend to weigh on non-yielding gold.

Among other precious metals, platinum XPT= gained 1.8 percent to $816 per ounce, while silver XAG= rose 1.2 percent to $15.99.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.