Palladium tops US$3,000/oz as supply fears grow; gold jumps over 1%

[BENGALURU] Palladium prices on Friday (Mar 3) rose above US$3,000 per ounce for the first time since May 2021 as concerns over supply shortages from top producer Russia mounted, and the war in Ukraine bolstered demand for safe-haven gold.

Spot palladium jumped as much as 8.4 per cent to US$3,008.74 per ounce in the session and was up 7.6 per cent at US$2,985.54 by 7.30 pm GMT.

Russia accounts for 40 per cent of global production of the auto-catalyst metal, which was headed for a 25 per cent rise this week, its best performance since late March 2020.

"There's growing consensus that Russia is not slowing down its military campaign and you're only going to see sanctions become a lot harder, and that's really going to disrupt businesses to get their hands on that supply of palladium," said Edward Moya, senior market analyst at Oanda.

"Flight bans, logistical issues and sanctions will keep palladium very bullish because this is happening during the time when demand is starting to pick up significantly."

Spot gold prices jumped 1.6 per cent to US$1,965.97 per ounce and were up about 4 per cent for the week so far. US gold futures settled 1.6 per cent higher at US$1,966.60.

"The Russia-Ukraine crisis will continue to support the prospect for higher precious metal prices," Saxo Bank analyst Ole Hansen said in a note.

"This not only due to a potential short-term safe-haven bid which will ebb and flow, but more importantly due to what this tension will mean for inflation, growth and central banks' rate hike expectations."

Bullion, considered a safe store of value during such uncertainties, largely ignored a 1 per cent jump in the dollar, an alternative safe haven, and the likelihood of an interest rate hike by the Federal Reserve later this month.

Stocks on Wall Street fell as concerns over the conflict in Ukraine overshadowed strong US jobs growth last month.

Spot silver rose 2 per cent to US$25.67, and was set for a fifth consecutive weekly gain. Platinum gained 3.4 per cent to US$1,117.06. REUTERS