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PRECIOUS-Palladium jumps to highest since Feb 2001, gold dips
November 28, 2017 / 1:41 PM / 18 days ago

PRECIOUS-Palladium jumps to highest since Feb 2001, gold dips

    * Palladium reaches highest since February 2001
    * Fed nominee Powell seen supporting dovish policy
    * Dollar index rebounds from Monday's two-month low
    * GRAPHIC-Plat/palladium ratio: tmsnrt.rs/1QjSZAC

 (New throughout, updates prices, market activity and comments,
adds palladium hits highest since February 2001)
    By Renita D. Young and Jan Harvey
    NEW YORK/LONDON, Nov 28 (Reuters) - Palladium jumped 2
percent on Tuesday to its highest price since February 2001, as
traders expecting higher demand from the automotive industry
piled into the metal on the first day of its new futures
contract, while gold slipped slightly as the U.S. dollar
advanced.
    Palladium        rose to a session high of $1,028.30, its
highest since February 2001. At 3:56 p.m. ET (2056 GMT) it was
at $1,025.15.
    "The automotive industry and the global economy have been
really strong," said Phillip Streible, senior commodities
strategist at RJO Futures in Chicago. He said the rally also
gained pace as traders took on new positions a day after the
December COMEX palladium futures contract expired.
    Gold edged lower as the dollar strengthened after U.S.
Federal Reserve chair nominee Jerome Powell told the Senate
Banking Committee at his confirmation hearing that the Fed was
likely to raise interest rates next month.             
    Powell, who aims to succeed current chair Janet Yellen and
her predecessor Ben Bernanke, said the Fed should "respond
decisively" to any new economic crisis. 
    After the hearing, the U.S. dollar index        rose against
a basket of currencies, rebounding from Monday's two-month low.
U.S. equities hit new highs.                           
            
    Rising U.S. interest rates can pressure gold prices because
they tend to strengthen the dollar and push U.S. bond yields
higher, reducing the appeal of non-yielding bullion.
    Spot gold        dipped 0.1 percent to $1,292.70 an ounce by
3:41 p.m. EST (2041 GMT), while U.S. gold futures        for
December delivery settled up 50 cents, or 0.04 percent, at
$1,294.90 per ounce. 
    So far in November, gold has stayed within its narrowest
trading range of any month since late 2005.
    "We’ve seen active buying on dips, yet certainly the
pressure of the idea of a pending rate hike - a good portion of
that is more than factored into the market," said David Meger,
director of metals trading at High Ridge Futures in Chicago.  
    Saxo Bank's head of commodity strategy Ole Hansen said the
upcoming tax vote in the U.S. Congress and tensions over North
Korea might move create enough activity in the gold market to
move prices out of their narrow range.              
    Silver        was down 1 percent at $16.85 per ounce, while
platinum        was 0.1 percent higher at $948.20. 
    Platinum has broadly maintained a historically unusual
discount to sister metal palladium since late September. 
    "As platinum prices increase, palladium prices should
increase in tandem, keeping the spread wide," Streible added.

    
 (Additional reporting by Vijaykumar Vedala in Bengaluru;
Editing by Bernadette Baum and David Gregorio)
  

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