Palladium hits record high, gold tests $2,000 an ounce in Ukraine

Ingots of 99.98 percent and 99.97 percent pure palladium are seen at the Krastsvetmet non-ferrous metals plant in the Siberian city of Krasnoyarsk, Russia November 22, 2018. REUTERS/Ilya Naymushin

March 7 (Reuters) – Palladium hit a record high as Russia’s invasion of Ukraine and resulting sanctions stoked fears of scarcity, while gold tested the psychological bar $2,000 in response to demand for safe-haven assets.

Spot palladium rose 10.2% to $3,308.49 an ounce at 12:16 GMT, on course for its biggest daily percentage rise since March 2020 after hitting an all-time high of 3,440.76 $ earlier.

“Palladium reflects a deep shortage and the anticipation of a further shortage as things unfold in Ukraine and Russia,” said independent analyst Ross Norman, adding that he expected the price increases continue. Read more

Western countries have imposed sanctions on Moscow, driving up the prices of a range of commodities. Russia accounts for 40% of the world’s production of palladium, used by automakers in catalytic converters to reduce emissions. Read more

“Possible supply failures from Russia are still priced into the palladium market,” Commerzbank analysts said in a note. “As supply outages could not be compensated elsewhere, the market is at risk of falling into a significant supply shortfall.”

Spot gold gained 1% to $1,988.46 an ounce, after hitting its highest level since Aug. 19, 2020 at $2,002.31 earlier in the session. US gold futures rose 1.3% to $1,991.30.

“The severity of the war in Ukraine and the uncertainty around its future trajectory fueled large-scale gold buying from safe-haven seekers, pushing prices toward $2,000 an ounce,” wrote Carsten Menke. , analyst at Julius Baer, ​​in a note.

“Further escalation would likely drive prices higher. The latter would likely have a more lasting impact, as it could push the global economy into a stagflation scenario, which we view as very bullish for gold.”

Bullion is considered a safe store of value during such uncertainties and also a hedge against rising inflation.

“In today’s environment, I would expect $2,000 to be a little more than a speed bump,” Norman said.

Silver gained 0.3% to $25.74, while platinum rose 2% to $1,143.08.

Reporting by Bharat Govind Gautam in Bengaluru, additional reporting by Brijesh Patel; edited by Barbara Lewis and Krishna Chandra Eluri

Our standards: The Thomson Reuters Trust Principles.