By Karthika Suresh Namboothiri
(Reuters) - Palladium slumped as much as 6 percent on Thursday, adding to the previous session's sharp slide, on concerns an economic slowdown could dent demand and as a weak technical picture pushed investors to book profits after a record run.
Meanwhile, gold slid over 1 percent to a more than two-week low as the dollar rallied.
Spot palladium sank 5.8 percent to $1,360.50 per ounce as of 11:10 a.m. EDT (1510 GMT), having earlier dipped to at $1,352.5, its lowest since Feb. 4.
The autocatalyst metal marked its biggest daily percentage loss in over two years in the last session, with prices plummeting 6.3 percent as investors booked profits.
Palladium has lost more than $250 since it hit a high of $1,620.52 last week.
"Palladium pulled back so much just because it had such a good run," said Michael Matousek, head trader at U.S. Global Investors.
"Palladium is a big component in catalytic converters. When there's a slowdown in the economy people will buy less cars and spend less money. People are thinking it had turned into a bubble because of the big run it had."
Palladium is crucial in the making of catalytic converters used in exhaust systems of vehicles, and a sustained deficit had supported the metal's surge.
"(The price rally) has been very speculative-driven and with the technical outlook changing somewhat after the break below $1,500, we're seeing the speculative interest being reduced," said Saxo Bank analyst Ole Hansen.
"From a technical perspective, the next major level is another $100 lower at $1,316."
Meanwhile, gold shed 1.2 percent to $1,294.05 per ounce, breaking below the key $1,300 support level.
U.S. gold futures were down 1.5 percent at $1,291.10 an ounce.
"Until we get an external catalyst, gold will continue to take its cues from the dollar," Peter Hug, Global Trading Director at Kitco Metals said in a note.
"The metals are also reflecting worries about an accelerated slowdown in the U.S. economy and global growth in general."
The U.S. dollar rose versus other currencies following more dovish soundings from central banks and renewed expectations that the European Central Bank will keep rates low for longer.
The Reserve Bank of New Zealand this week joined a growing list of central banks that have turned dovish amid signs of a slowing global economy, saying its next move in interest rates was likely to be a cut.
The U.S. economy slowed more than initially thought in the fourth quarter, keeping growth in 2018 below the Trump administration's 3 percent annual target, and corporate profits fell by the most in a year.
Other precious metals followed suit with platinum falling 1.3 percent to $837.00 per ounce, and silver down 1.25 percent to $15.09.
(Reporting by Karthika Suresh Namboothiri in Bengaluru; Editing by Marguerita Choy)
This story has not been edited by Firstpost staff and is generated by auto-feed.
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Updated Date: Mar 29, 2019 00:05:48 IST