Gold Prices Rise, Palladium Touches 7-Month Highs

Gold Prices Rise, Palladium Touches 7-Month Highs – Gold Prices Rise, Palladium Touches 7-Month Highs

Palladium prices extended gains to more than seven-month highs, driven by concerns over supply shortages following tough sanctions against top producer Russia. The Ukrainian crisis and soaring inflation also pushed up the demand for and the price of gold.

The spot price of palladium, which automakers use in catalytic converters to curb emissions, rose 4.1 percent to USD 2,779.09. This is the highest level since mid-July 2021.

“Palladium is the only commodity from Russia that accounts for a sizeable amount of exposure to the country, so it’s in the sweet spot in terms of impact,” said ED&F Man Capital Markets analyst Edward Meir.

Western countries have imposed sanctions on Russia for its invasion of Ukraine, which accounts for 40 percent of global palladium production.

Gold prices rose 0.4 percent to USD 1,933.31 per ounce and US gold futures settled 0.7 percent higher to USD 1,935.90.

“Gold has largely traded at the mercy of the Ukraine-Russia headlines, but is also starting to rekindle its relationship with tangible results ahead of the March FOMC meeting,” Standard Chartered analyst Suki Cooper wrote in a note.

“Expectations for rate hikes have been reduced and we continue to expect the Fed to hike 25bps in March. Along with the flight to safety, the conflict has implications for physical markets as Russia restarts central bank gold buying.”

Interest Rate Increase

Gold Prices Rise, Palladium Touches 7-Month Highs

Investors are looking for further clues on a US rate hike as Fed Chair Jerome Powell’s Congressional testimony enters a second day.

Although gold is considered a safe investment during political and economic uncertainty, rising US interest rates increase the opportunity cost of holding interest-free gold bullion.

Meanwhile, data showed the number of Americans filing new claims for unemployment benefits fell more than expected last week.

Meanwhile, silver prices fell 0.5 percent to USD 25.12 per ounce, while platinum rose 0.6 percent to USD 1,077.76.

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