Palladium hits record high on strike threat; gold steady

By Sumita Layek (Reuters) - Palladium hit a new record high on Monday as the threat of strikes in the South-African mining industry exacerbated a supply deficit for the metal, while gold held steady as the dollar slipped on signs of a U.S.-China trade deal.

Reuters February 26, 2019 01:05:21 IST
Palladium hits record high on strike threat; gold steady

Palladium hits record high on strike threat gold steady

By Sumita Layek

(Reuters) - Palladium hit a new record high on Monday as the threat of strikes in the South-African mining industry exacerbated a supply deficit for the metal, while gold held steady as the dollar slipped on signs of a U.S.-China trade deal.

Palladium hit a peak of $1,531 per ounce, and was up 2 percent at $1,527.50 an ounce by 12:49 p.m. EST (1749 GMT), with the autocatalyst metal having soared more than 80 percent since mid-August on a sustained supply shortage.

At least 15 mining firms in South Africa, home to the world's biggest platinum group metals deposits accounting for over 90 percent of global output, have received notices of strikes next week in support of colleagues at Sibanye-Stillwater who downed tools over wages and job cuts.

"The fundamental issue with palladium is any strike will drive prices through the roof because there is a shortfall with normal production, so any collapse of production will support prices," said Miguel Perez-Santalla, vice president of Heraeus Metal Management in New York.

"The threat of the South African mines strike spreading to the platinum mining industry is enough to make people nervous and that's why we're seeing some short-covering in platinum and palladium, driving both the metals higher."

Platinum, which briefly touched its highest since Nov. 20 at $853.50, was up 0.8 percent at $847 an ounce.

Meanwhile, spot gold was down 0.1 percent to $1,326 an ounce and U.S. gold futures slipped 0.4 percent to $1,328.10.

Spot silver was down 0.3 percent to $15.86 an ounce.

U.S. President Donald Trump on Monday said he was optimistic that a final trade deal could be reached with China and that he would hold a summit to sign any pact, having announced on Sunday that he would delay an increase in U.S. tariffs on Chinese goods.

"Much of last year, we saw the dollar benefiting from safe haven flows and gold was suffering because of the dollar's strength. With the easing of the trade tensions, gold prices are likely to benefit," said Suki Cooper, precious metals analyst at Standard Chartered Bank.

"The dollar at the margins has certainly helped provide a boost to gold."

The dollar fell against a basket of other currencies as risk sentiment improved, pushing global equities higher, on signs of a thaw in the trade dispute.

Going forward, it remains to be seen "if capital begins to switch out of the metals into the equity space," Peter Hug, global trading director at Kitco Metals, said in a note.

Investors were now eyeing a testimony by U.S. Federal Reserve Chairman Jerome Powell on Tuesday and Wednesday for further cues on U.S. monetary tightening.

(For a graphic on 2019 asset returns, click here http://tmsnrt.rs/2jvdmXl)

(Reporting by Sumita Layek in Bengaluru; Editing by Marguerita Choy)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

Find latest and upcoming tech gadgets online on Tech2 Gadgets. Get technology news, gadgets reviews & ratings. Popular gadgets including laptop, tablet and mobile specifications, features, prices, comparison.

also read

Putin says he has noted Joe Biden's harsh anti-Russian rhetoric
World

Putin says he has noted Joe Biden's harsh anti-Russian rhetoric

MOSCOW (Reuters) - Russian President Vladimir Putin said on Wednesday he had noted what he called "sharp anti-Russian rhetoric" from U.S. Democratic presidential candidate Joe Biden, but that he had been encouraged by Biden's comments on arms control. Putin, in comments on state television ahead of the U.S.

In hardening stance, France, Germany push for EU sanctions on Russians over Navalny
World

In hardening stance, France, Germany push for EU sanctions on Russians over Navalny

By John Irish and Robin Emmott PARIS/BRUSSELS (Reuters) - France and Germany said on Wednesday they would propose European Union sanctions against Russian individuals after receiving no credible answers from Moscow over the poisoning of Kremlin critic Alexei Navalny with a nerve agent. Several Western governments have said Russia, which has denied accusations by Navalny that it was involved in the poisoning, must help in investigations or face consequences. The decision and speed with which Europe's two main powers agreed to push ahead with sanctions suggests a hardening of the bloc's diplomacy towards Moscow.

Coronavirus patient Trump seeks ways to mount campaign comeback
World

Coronavirus patient Trump seeks ways to mount campaign comeback

By Steve Holland WASHINGTON (Reuters) - U.S. President Donald Trump, under coronavirus quarantine in the White House and restricted from traveling, is seeking ways to put a spark back in his struggling re-election bid and get behind his desk in the Oval Office with four weeks left until Election Day.