· Palladium prices fell to a more than five-week low on Thursday, a day after posting their steepest decline in over two years, as concerns about the global economy and a buoyant dollar prompted investors to take profits.
Spot palladium fell 0.5 percent to $1,436.26 per ounce at 0541 GMT. Prices tumbled 6.3 percent on Wednesday, marking the biggest one-day percentage fall since January 2017.
The metal, used extensively in the making of catalytic converters in vehicles, has already shed about $190 from a record peak of $1,620.52 an ounce hit last week.
· “With the concerns around economic growth and a stronger dollar, investors took profits after the strong rally we’ve had in the past few weeks,” ANZ analyst Daniel Hynes said, adding that while worries about demand have emerged, supply constraints remain greater.
“The tightness in the market and concerns about supply side issues will keep prices elevated. But if we do see continued strength in U.S. dollar, this sell-off might extend a little bit longer.”
· The dollar index was trading near a two-week peak and extended gains for a third straight session against its peers, making dollar-denominated metals more expensive for holders of other currencies.
· Some analysts also attributed Wednesday’s sharp sell-off to comments by Anglo American Chief Executive Mark Cutifani, who said palladium was a “bubble”.
The auto-catalyst metal was trading below the 55-day moving average of around $1,453 an ounce, which it breached for the first time since August on Wednesday.
· “Given the extent of the technical damage, we suspect that palladium prices will likely push somewhat lower over the days ahead as a consolidation range starts to get carved out,” INTL FCStone analyst Edward Meir wrote in a note.
· Spot gold prices on the other hand was little changed at $1,311.29 per ounce. Bullion touched a one-week low earlier in the session, mainly pressured by a strong dollar.
U.S. gold futures were steady at $1,310.10 an ounce.
· “The uncertainties around the macro backdrop have elicited some strength to the U.S. dollar,” ANZ’s Hynes said. “The gold market is closely following data in the short term and how that affects the U.S. Federal Reserve.”
· GOLD TECHNICAL ANALYSIS
Gold prices are back to testing near-term support in the 1303.70-09.12 area, teasing a break that might put them on course toward forming a choppy Head and Shoulders top. That would require a subsequent breach of the would-be pattern’s neckline, now at 1282.54. Initial resistance is at 1326.30, followed by the February swing top at 1346.75.
· Silver edged 0.1 percent higher to $15.30 per ounce, while platinum rose 1 percent to $856.29.
Reference: Reuters, Daily FX, FX Street
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