Palladium Dips Amid Chorus for Correction; Gold Slides Too
Investing.com - Palladium's rally has spawned calls for record highs above $1,500, but the auto-catalyst metal may run out of gas first and fall into a range for a while, just like gold.
Used for purifying auto emissions, palladium dropped $17.75, or 1.3%, on its spot price on Friday to trade at $1,382.65 per ounce by 2:00 PM ET (19:00 GMT). On Thursday, it hit all-time highs of $1,440.35, making it the world's most valuable metal.
In futures trade, the benchmark March palladium contract on the New York Mercantile Exchange's Comex settled down $13.10, or 1%, at $1,335.10.
Since surpassing gold's 2019 highs of above $1,300 on Jan. 4, palladium's spot price renewed its highs at the top five more times, culminating in Thursday's run above $1,400 for the first time.
Gold has treaded water in a broad $1,285 to $1,295 range after a Jan. 4 peak of $1,300.40 on its spot price.
The spot price of gold, or bullion, was down $9.66, or 0.8%, at 1,282.37 by 2:00 PM ET.
On Comex, February gold futures settled down $9.75, or 0.8%, at $1,282.60.
Palladium's run-up has been fueled by stimulus measures aimed at boosting car ownership in China. Also helping was a projection by Metals Focus that supplies will remain in deficit this year for an eighth-straight year.
Even so, the auto-catalyst metal's near-10% gain since the start of the year -- and 70% jump since August -- may be overdone, some say.
"Looking at how high far we have progressed and how fast, the price of palladium is way overdue for a correction, especially if the news stories start to dry up" on its supply shortage, said Walter Pehowich, industry analyst and executive vice-president at Dillon Gage Metals in Addison, Texas.
Pehowich said estimates for 2019 palladium short supply range from as low as 250,000 ounces to a high of 1 million ounces "depending on who you talk to".
"If fresh metal comes into the market place ... a sell off could occur," he added. "And that’s what I expect to happen."
In other precious metals on Comex, silver futures slid by 15 cents, or 1%, to $15.39 per ounce.
In base metals,copper rose 3.4 cents, or 1.3%, to $2.71 per pound.
Related Articles
Oil prices steady, but global growth worries hold sway
Oil Down Again on Worry Over U.S. Crude Stockpile Situation
Gold, Palladium up Slightly as Precious Metals Continue Their Shuffle
