Palladium scales new peak; gold up as Fed leaves rates steady

By Karthika Suresh Namboothiri (Reuters) - Palladium hit an all-time high on Wednesday on concerns over tight supplies of the autocatalyst metal, while gold reversed course to rise after the U.S. Federal Reserve kept interest rates unchanged. Spot palladium rose 0.6 percent to $1,605.51 per ounce as of 2:25 p.m.

Reuters March 21, 2019 01:05:36 IST
Palladium scales new peak; gold up as Fed leaves rates steady

Palladium scales new peak gold up as Fed leaves rates steady

By Karthika Suresh Namboothiri

(Reuters) - Palladium hit an all-time high on Wednesday on concerns over tight supplies of the autocatalyst metal, while gold reversed course to rise after the U.S. Federal Reserve kept interest rates unchanged.

Spot palladium rose 0.6 percent to $1,605.51 per ounce as of 2:25 p.m. EDT (1825 GMT), having earlier touched a record high of $1,608.

Palladium is extensively used in the making of catalytic converters in vehicles and has benefited from a switch away from diesel engines and demand for hybrid electric vehicles.

"Europe came up with stringent environmental demand and environmental initiatives while we have supply issues from South Africa and Russia," said Eli Tesfaye, senior market strategist for brokerage RJO Futures in Chicago.

"There is now talk about using substitutes, such as platinum, which has come up higher as palladium gets more and more expensive."

A possible temporary export ban on precious metal scrap from Russia and hopes of economic stimulus from China rubbing off on industrial metals has helped lift prices. This year alone, spot prices have jumped over 26 percent. [nL8N21160X]

Platinum rose 2.2 percent to $864.25 per ounce, after surging 3 percent on Tuesday on increased demand for the closest substitute to expensive palladium's industrial properties.

Investor flows into physically backed platinum exchange-traded funds (ETFs) and a sharp drop in speculative bets on lower prices suggest platinum is on the cusp of recovery.

Meanwhile, spot gold swung into positive territory after the Fed announced it will not hike interest rates this year.

Gold climbed 0.7 percent to $1,315.50 per ounce, having risen to nearly three-week high of $1,315.61.

The Fed's decision would be helpful to precious metals since the cost of borrowing is going to be benign, so they will have less competition from higher yields, said George Gero, managing director at RBC Wealth Management.

"On the other hand, if inflation seems benign, gold may continue to do well, but not extra well."

Gold is highly sensitive to rising interest rates, which lift the opportunity cost of holding non-yielding bullion. They also boost the dollar, in which the metal is priced.

The dollar fell against a basket of currencies lending further support to gold. [USD/]

Meanwhile, U.S. gold futures settled down 0.4 percent at $1,301.7 per ounce.

Silver was up 1.1 percent at $15.51 per ounce.

(Reporting by Karthika Suresh Namboothiri and Eileen Soreng in Bengaluru; Editing by Marguerita Choy and Richard Chang)

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

Updated Date:

TAGS:

also read

Apple will enable storage of IDs like drivers licenses on iPhones
Business

Apple will enable storage of IDs like drivers licenses on iPhones

By Stephen Nellis (Reuters) -Apple Inc on Monday said it will offer the ability to store state-issued identification cards digitally on iPhones and that it is working with the U.S. Transportation Security Administration to accept the digital IDs at airports, one of several updates to the software that runs on its devices. It also showed updates to its FaceTime video chat app, adding the ability to schedule calls with multiple attendees and making the software compatible with Android and Windows devices.

Airline bosses call on UK and U.S. to lift trans-Atlantic travel restrictions
Business

Airline bosses call on UK and U.S. to lift trans-Atlantic travel restrictions

LONDON (Reuters) - The bosses of all airlines flying passenger services between Britain and the United States called on Monday for the countries' governments to relax COVID-19 restrictions to reopen travel routes between the two countries. After more than a year of restrictions, the CEOs of American Airlines, IAG unit British Airways, Delta Air Lines, United Airlines and JetBlue Airways Corp said high vaccination rates in both countries meant travel could restart safely. The push for reopening trans-Atlantic routes on Monday comes ahead of meetings between U.S.

EU patience wearing thin with UK on N.Ireland, weighing options
Business

EU patience wearing thin with UK on N.Ireland, weighing options

BRUSSELS (Reuters) - The European Union's patience towards Britain over Brexit arrangements in Northern Ireland is wearing thin and the bloc will consider its options should Britain continue its "confrontational path", an EU official said on Monday.