Palladium scales 7-month peak, Gold firms as Ukraine crisis rages on

Spot prices of palladium, used by automakers in catalytic converters to curb emissions, rose 3.7% to $2,768.21 per ounce by 1343 GMT, rising for a fourth session to hit its highest since mid-June 2021 earlier in the session.

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New York: Palladium raced to an over seven-month peak on Thursday in a rally sparked by concerns over supply from top producer Russia, while a relatively less hawkish Federal Reserve and safe-haven demand due to the Ukraine crisis boosted gold prices.

Spot prices of palladium, used by automakers in catalytic converters to curb emissions, rose 3.7% to $2,768.21 per ounce by 1343 GMT, rising for a fourth session to hit its highest since mid-June 2021 earlier in the session.

“With Russia being such a large exporter of palladium, there’s a high likelihood of supply issues, especially in the near-term as companies better understand their new limitations,” said Craig Erlam, senior market analyst at OANDA.

“These sanctions have been designed to enable continued trade of commodities the West relies on, so any impact we’re seeing is unintentional to an extent and will contribute to higher prices, at least for now.”

Western nations have piled sanctions on Russia for its invasion of Ukraine. Russia accounts for 40% of global palladium production.

“The market is in ‘self sanction mode’ trying to avoid anything relating to Russian oil, Russian palladium, Russian whatever,” said Bernard Dahdah, an analyst at Natixis.

Spot gold rose 0.2% to $1,929.11 per ounce. U.S. gold futures gained 0.5% to $1,931.60.

“It’s less likely that the Fed is going to raise rates by 0.5 basis points,” so that has given an extra boost to gold prices, along with demand due to the crisis in Ukraine, Natixis’ Dahdah said.

Although gold is considered a safe investment during political and economic uncertainty, rising U.S. interest rates increases the opportunity cost of holding non-interest bearing bullion.

However, strength in rival safe-haven the U.S. dollar limited gains in greenback-priced bullion.

Spot silver rose 0.3% to $25.32 per ounce, while platinum rose 1.8% to $1,089.82.

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