Palladium Jumps to Record High, Gold Falls

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Palladium Jumps to Record High, Gold Falls Palladium rose to a more than two-year high as Russia, the largest producer of the metal in the world, faces more sanctions by the US. Gold declined.

The US Treasury Secretary Jacob J.Lew said that the country may impose more significant sanctions on Russia if it keeps fueling tensions in Ukraine. Lithuania said on Friday that it had sent a warship to the Baltic Sea, citing interruption of civilian shipping by a Russian military ship in the region.

Palladium, which is deployed in devices for motor vehicle pollution control, gained 12% this year as the combined effect of possible hampering of Russian exports and mine strikes in South Africa affected prices.

According to an April 8 report by Morgan Stanley, the demand of the metal will surpass supply for the third year in 2014.

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“We already have significant problems with production because of the labor strike in South Africa,” Bart Melek of Toronto-based TD Securities told Bloomberg in a phone interview.  He said that further economic sanctions on Russia may stand in the way of financing for producers in Russia, hurting supply of the metal.

On the New York Mercantile Exchange, June settlement Palladium added 1.8% to trade at $806.80 per ounce as of 1:13 pm on Friday, after hitting $812.50, the highest price since the 3rd of August 2011.

Per-ounce spot prices surged 2.4% to hit their highest since August 2011 to settle at $810.

US Secretary of State John Kerry said on April 8 that his country was considering additional measures targeting energy, banking and mining components of the Russian economy.

June delivery gold plunged 0.1% to settle at $1,319 per ounce, according to Reuters.

Spot gold steadied at $1,317.76 per ounce as of 3:59 pm.

In the meantime, platinum for July delivery added 0.2% to trade at $1,462.60 per ounce on the Nymex.  To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.

To contact the reporter of this story; Jonathan Millet at john@forexminute.com