Palladium surges past $1,500/oz for first time, gold steadies
(Adds quotes and details, updates prices)
* Minutes of Fed's Jan meeting due at 2 p.m. EST/1900 GMT
* Palladium up more than 17 pct so far this year
* Slight dip in gold post Fed meet
* GRAPHIC-2019 asset returns: http://tmsnrt.rs/2jvdmXl
By Eileen Soreng
Feb 20 (Reuters) - Palladium jumped above the $1,500 per
ounce mark for the first time on Wednesday, propelled by a stark
supply deficit, while gold steadied near a 10-month peak as
doubts lingered over future rate hikes after the U.S. Federal
Reserve released its minutes.
Spot palladium, which traded as high as $1,502 per
ounce, was up 0.6 percent at $1,488.50 at 3:49 p.m. EST (2049
"Palladium's deficit is likely to persist for at least the
next couple of years and there's limited opportunity to ease the
market's tightness," said Suki Cooper, precious metals analyst
at Standard Chartered Bank.
Leading autocatalyst manufacturer Johnson Matthey
said last week that a persistent supply deficit in the palladium
market was likely to widen this year.
Tighter emissions legislation means "palladium loadings
continue to rise, offsetting weakness we've seen in auto sales,"
Cooper said. "Demand remains strong and we haven't seen an
increase in mine outputs."
Further, a broad-based substitution from palladium to
platinum was not immediately feasible, analysts said.
While both metals are primarily consumed by carmakers in
catalytic converter manufacturing, platinum is more heavily used
in diesel vehicles that have fallen out of favour since the
Volkswagen emissions-rigging scandal broke in 2015.
Unlike platinum, palladium has also benefited from a switch
to petrol engines and expectations for growth in hybrid electric
vehicles, which tend to be partly gasoline-powered, helping
cushion the metal from falling global car sales.
Indicative of the bullish sentiment, net long positions in
palladium have jumped since last August, with prices rising
about 80 percent during the same period.
Meanwhile, spot gold edged 0.1 percent lower to
$1,339.56 per ounce, having slipped about 0.3 percent soon after
Fed's minutes showed U.S. economy and its labor market remained
strong, prompting some expectations of at least one more
interest rate hike this year, propping up the dollar slightly.
Also, the policymakers gave little sense of how long their
"patient" stance on U.S. interest rate policy would last.
"The Fed came out with everything that everybody thought
they would come out with but with some restraint. That restraint
sparked a minor proft-taking (in gold)," said George Gero,
managing director at RBC Wealth Management.
The bullion was however trading near a 10-month peak of
$1,346.73 scaled earlier in the day.
U.S. gold futures settled up 0.2 percent at $1,347.90
Gold will continue to do well since there are enough global
worries, political and economic, to prompt investors to seek
additional havens if the stock markets start to slowdown, Gero
Spot platinum climbed 0.8 percent to $824 per ounce,
and silver gained 0.6 percent to $16.07.
(Additional reporting by K. Sathya Narayanan and Karthika
Suresh Namboothiri in Bengaluru; Editing by Marguerita Choy and
First Published: 2019-02-20 02:44:08
Updated 2019-02-20 23:07:34
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