Palladium jumps 11% as London market blocks sale from Russian refineries

[BENGALURU] Palladium rose 11 per cent on Friday (Apr 8) on renewed supply concerns after trading in the metal from Russian refineries was suspended in London over Moscow's invasion of Ukraine.

Palladium, used by automakers in catalytic converters to curb emissions, rose 7.8 per cent to hit its highest since Mar 25 following the announcement by the London Platinum and Palladium Market, a trade association that accredits refineries.

"Around 40 per cent of primary palladium supply stems from Russia, for the remainder of the year around 1.8 million ounces of primary production may be at risk ... the suspension could exacerbate the undersupply," said Standard Chartered analyst Suki Cooper.

Palladium rose to US$2,408.50 as of 5.54pm GMT, en route to its first weekly gain in five. The metal surged to an all-time high of US$3,440.76 on March 7 on concerns over supply from top producer Russia.

"Ultimately, the market is worried that we're going to have an even more scarce market than before," said Bart Melek, head of commodity strategies at TD Securities.

Spot gold rose 0.5 per cent to US$1,941.94 per ounce and was up 0.9 per cent for the week, while US gold futures rose 0.4 per cent to US$1,945.6.

Gold's rise came despite solid gains in the US dollar, a rival safe-haven asset. A stronger dollar generally erodes gold's appeal for overseas buyers.

The uncertainty over what the Federal Reserve is going to do after raising rates is driving flows into gold, said Edward Moya, senior market analyst at Oanda.

Fears of a recession, growth concerns along with inflationary pressures are also causing people to hedge through gold, Moya added.

While gold is considered a refuge asset during global conflicts and rising inflation, higher US interest rates increase the opportunity cost of holding the non-yielding bullion.

Silver rose 0.9 per cent to US$24.78 per ounce, up 0.6 per cent for the week, while platinum gained 1.4 per cent to US$975.91 but was down for a fifth consecutive week. REUTERS