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Palladium White Hot With New $1,600 Peak; Gold Rallies Late on Fed

By Barani Krishnan

Investing.com - There just seems to be no stopping the palladium bull, nor the gold bug with the Fed's much-expected stay in rate hikes.

The spot price of palladium hit record highs for a third straight day on Wednesday, topping $1,600 an ounce for the second time in two days. The silvery-white metal has benefited from worries of continued scarcity in the commodity, produced mainly in Russia and South Africa, and a benign interest rate regime in the U.S. from a Federal Reserve patient about raising interest rates.

Spot palladium was up $9.50, or 0.6%, at 1,600.50 per ounce by 2:10 PM ET (18:10 GMT), after setting an all-time high at $1,603.80.

Palladium futures' most-active June contract, traded on the Comex division of the New York Mercantile Exchange, settled up $8.50, or 0.5%, at $1,560.40. Its peak was $1,565.30.

"The price of palladium continues to climb on strong fundamentals as smart investors continue to adjust and move up their stop loss levels," said Walter Pehowich, executive vice-president at Dillon Gage Metals in Addison, Texas.

Gold initially slipped before rallying on the Federal Reserve's latest monthly policy statement on interest rates. The Fed left rates unchanged at its March meeting amid concerns over slowing growth both domestically and abroad. The central bank has signaled for months now that it has no intention to unravel U.S. economic growth with disruptive rate hikes.

Spot gold, reflective of trades in physical bullion, rose by $4.89, or 0.4%, to $1,301.70 per ounce.

Comex gold futures for April delivery settled the official trading session down $4.80, or 0.4%, at $1,301.70 per ounce. Gold rallied in after-hours trading and after the Fed statement was released. It rose $6.21, or 0.5%, to $1,312.80 by 2:10 PM ET, with a peak at $1,313.20.

The dollar, a contrarian trade to gold and other precious metals, was also volatile on Wednesday. The Dollar Index, which measures the greenback against a basket of six currencies, fell 0.4% to a two-week low of 95.45 by 2:10 PM ET.

Palladium's rally heightened this week on news that Russia was mulling a ban on the export of precious metals scrap and tailings to promote domestic refining of the materials.

More than four-fifths of the world’s palladium, a critical material in anti-pollution devices on cars, comes as byproduct from nickel mining in Russia and platinum mining in South Africa. That leaves the global supply dependent on the success of extraction in those two metals.

Johnson Matthey (LON:JMAT), a leading autocatalyst manufacturer, said the shortfall in the roughly 10 million ounce-a-year palladium market narrowed in 2018 to 29,000 ounces from 787,000 ounces in 2017, its widest in three years.

Trades in other Comex metals as of 2:10 PM ET (18:10 GMT):

Platinum futures up $12.25, or 1.4%, at $864.90 per ounce.

Silver futures up 12 cents, or 0.8%, at $15.49 per ounce.

Copper futures up 1 cent, or 0.4%, at $2.93 per pound.

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