- February 26, 2019
- Posted in LOCAL
Palladium hit a record high on Tuesday, surging above $1,550 as a threatened strike by South African mineworkers added to supply risk concerns in an already tight market, while gold prices edged up on a subdued dollar.
Spot palladium traded as high as $1,553 per ounce as of 0400 GMT.
The metal has risen 23 percent this year on a sustained supply deficit and has gained for seven straight months.
At least 15 mining firms in South Africa, a major producer of the autocatalyst metal, have received notices of strikes to be held later this week.
“Support comes from supply side issues, mainly from South Africa where a strike by the union has a potential to disrupt output further,” ANZ analyst Daniel Hynes said, adding that positive news on Sino-U.S. trade is also providing support.
“There’s been a feeling that demand overall would be impacted by tariffs on the either side and this potential deal will minimize the risk of that occurring, so the market is viewing this as a positive move.”
U.S. President Donald Trump said on Monday he may soon sign a deal to end a trade war with Chinese President Xi Jinping if their countries can bridge remaining differences, saying negotiators were “very, very close” to a deal.
“(However,) considering the rally we are seeing in prices, the risk of a correction is increasing by the day. (But) for the moment the trend is likely to continue,” Hynes said.
Meanwhile, spot gold gained 0.2 percent to $1,329.08 per ounce and U.S. gold futures were up 0.1 percent at$1,331.2 as the dollar remained subdued.
The U.S. unit was down 0.1 percent against major currencies .
“Investors will now be moving away from the trade issue and will start to focus on macro releases and testimony by Federal Reserve Chairman Jerome Powell,” INTL FCStone analyst Edward Meir said in a note.
Fed chair Powell will be testifying on U.S. monetary policy and the economy before the Senate Banking Committee on Tuesday and Wednesday.
“Powell could use the opportunity to move perceptions a little bit more towards the hawkish side. In such a case, we could see modest dollar strengthening set in over the course of his remarks, likely exerting more downward pressure on gold.”
Elsewhere, silver rose 0.2 percent to $15.91 per ounce, while platinum was up 0.6 percent at $854, after scaling its highest since early November at $856.50._Reuters