- March 19, 2019
- Posted in Africa
Palladium prices surged to a record on Tuesday, bolstered by worries about shrinking supply of the auto-catalyst metal, while gold rose on expectations that the U.S. Federal Reserve will maintain a dovish tone at its policy meeting this week.
Spot palladium was up 0.3 percent at $1,588.53 an ounce, as of 0339 GMT, after marking an all-time high of $1,591 earlier in the session.
“The demand has been an ongoing narrative for a while. So, the fundamentals are strong and there is an ongoing supply deficit problem,” said Ilya Spivak, a senior currency strategist at DailyFX.
Expectations for more economic stimulus by China, the world’s biggest auto market, could also be a short-term catalyst for the market, Spivak said.
Prices have nearly doubled since the mid-August lows and have already surged about 26 percent for the year.
Palladium has continued to firm despite weak car sales as news that Russia is mulling a ban on scrap and tailing exports threatens to further tighten an already tight market, TD Securities wrote in a weekly note.
Russia is a major producer of the metal, which is used mainly in catalytic converters.
Meanwhile, spot gold rose 0.3 percent at $1,306.76 per ounce, as the dollar languished near two-week lows hit in the previous session on growing expectations the Fed would shift to a more accommodative policy stance.
U.S. gold futures rose about 0.4 percent to $1,306.80.
“Gold has been edging up and the main driver is a softening dollar,” Margaret Yang, a market analyst with CMC Markets, Singapore said adding the Fed’s decision and Brexit vote could be gold boosters in the short term.
The U.S. central bank will start its two-day meeting on interest rates later in the day.
“If the Fed is more dovish than expected, dollar is likely to move lower, and there is a lot of uncertainty surrounding Brexit with hedging demand for safety.”
Prime Minister Theresa May’s Brexit plans were thrown into further turmoil on Monday when the speaker of parliament ruled that she could not put her divorce deal to a new vote unless it was re-submitted in a fundamentally different form.
Gold is used as a safe investment during times of political and financial uncertainties.
Indicative of investor sentiment toward gold, holdings of the SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose about 1.1 percent on Monday, its biggest one-day percentage gain since Jan. 18.
In other precious metals, silver slipped 0.4 percent to $15.38 per ounce, while platinum gained 0.8 percent to $836.92 per ounce._Reuters