Bengaluru — Palladium retreated on Tuesday on profit-taking after the automotive catalyst metal breached $1,550 for the first time due to a worsening supply scenario, while gold held in a tight range ahead of US Fed chair Jerome Powell’s testimony.
Spot palladium, which traded as high as $1,554.50 an ounce earlier in the day, was down 0.3% at $1,536.70 as of 1.43pm GMT.
At least 15 mining firms in SA, a major palladium producer, have received notices of strikes to be held later this week, providing further impetus to its gains. The metal has risen more than 21% so far this year on a sustained supply deficit.
“There are increased talks that palladium is entering into bubble territory because of the relentless rally we have seen,” Saxo Bank analyst Ole Hansen said. “Those who are long are tempted to take profits, while we potentially may see a few attempts to sell some shorts in the market.”
Elsewhere, spot gold was barely changed at $1,326.40 an ounce and US gold futures were steady at $1,328.50 as the dollar remained subdued.
“The market is increasingly getting fed up, listening to the trade developments,” Hansen said, adding that bullion is now looking for further direction from the stock markets and concrete developments in US-China trade relations.
On Sunday, US President Donald Trump decided to delay a steep tariff hike on Chinese goods, touting progress in weekend trade talks.
The next potential impetus for the market will be Powell’s testimony on US monetary policy and the economy before the Senate banking committee later on Wednesday.
“Powell could use the opportunity to move perceptions a little bit more towards the hawkish side. In such a case, we could see modest dollar strengthening set in over the course of his remarks, likely exerting more downward pressure on gold,” INTL FCStone analyst Edward Meir said in a note.
“As long as geopolitical risks, concerns over global growth reaching a plateau, and speculation over the Fed taking a pause on rate hikes remain key themes, gold is insulated from extreme downside shocks,” Lukman Otunuga, research analyst at FXTM, said in a note.
Silver fell 0.2% to $15.86 an ounce, while platinum was up 0.2% to $850.34, having touched $857.50, its highest since early November.
Reuters
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