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.
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.
By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States
BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.