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Palladium Sets New Record; Gold Gains on Fed Cut Hopes

Investing.com - Palladium soared to record highs for a second-straight day Wednesday to rule the roost in precious metals. Gold was also a modest gainer after dismal U.S. economic data encouraged buying on rate-cut expectations.

The spot price of XPD/USD reached an all-time high of $1,780.40 per ounce, up $10 from Tuesday’s record. It later consolidated, trading at $1,772.20 by 2:48 PM ET (18:48 GMT) for a gain of $33.75, or 1.9%, on the day.

Palladium futures, traded on New York Mercantile Exchange’s COMEX division, registered its own record high at $1,722.20, an improvement over Tuesday’s $1,705.55. Palladium futures settled Wednesday’s regular trading on COMEX at $1,735, up $38.40, or 2.3%, on the day.

Palladium, used in vehicle exhausts to reduce harmful emissions, has rallied more than $300 since early August, when it touched the lowest level in nearly two months.

“Palladium keeps its upward pressure on as demand for the product increases again, after traders attempted to take profit earlier this week as China cooled car sales numbers,” noted George Gero, precious metals analyst at RBC Wealth Management in New York.

U.S. gold futures for December delivery settled up $10.50, or 0.7%, at $1,494 per ounce.

Spot gold was up $8.80, or 0.6%, at $1,489.92.

Gold prices found a bid at the lower end of their recent trading range on Wednesday as weak retail sales data from the U.S. encouraged traders again to place bets on further interest-rate cuts from the Federal Reserve. The Fed meets Oct. 29-30 and traders are pricing in an 88% chance that the central bank will cut rates by a quarter point for a third time in a row, according to Investing.com's Fed Rate Monitor Tool.

Some thought those odds could be better, though they remained optimistic about gold’s prospects in the near term.

“We still think gold remains attractive, given that the market is still somewhat underpricing the likelihood of an October cut, which suggests that Fed pricing should still remain supportive,” Canadian brokerage and banking group TD said in a note.

Gold also found safe-haven support from a failed breakthrough in Brexit talks between the EU and the U.K.

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