Palladium surges; gold shines
NEW YORK: Palladium and platinum rose sharply early on Wednesday as bets on lower prices were reversed in thin conditions after the metal broke above key chart levels, while gold rose as weak US data weighed on the dollar.
Palladium surged overnight in Asia, hitting 14-month highs and marking the biggest one-day rally in more than five months. Traders said a wave of short covering was likely triggered after the metal broke above $700 an ounce, and then above last week’s 14-month peak of $723 an ounce.
Spot palladium was up 4.1 percent at $722.50 an ounce 2:57 p.m. EDT (1857 GMT), having risen as high as $746.10 an ounce in Asian trading hours. The move was likely to have been exacerbated by thin liquidity, analysts said.
The surprise rally appeared to be a combination of short-covering and new longs, one US physical dealer said.
On Tuesday, the China Passenger Car Association said vehicle sales jumped in July, but palladium prices barely reacted with a quiet nudge higher on that day.
“There’s a likelihood that that had a play in the picture,” the dealer said about Wednesday’s rally.
Palladium, used in catalytic converters in cars, saw its biggest one-month price rise in 8-1/2 years in July, potentially leaving investors who had bet on lower prices exposed to heavy losses.
Platinum was up 2 percent at $1,173.24 after rising to $1,191.70, its loftiest in over 17 months.
“(Commodity) prices today are being supported by a combination of short covering and a weak dollar. Many people were a few positions short and you saw a lot of trying to cover that,” Marex Spectron’s head of precious metals David Govett said.
Gold, often perceived as a hedge against economic and financial risk, 0.5 percent higher at $1,346.53 an ounce.
The most active US gold futures for December delivery settled up 0.4 percent at $1,351.90.
The metal rose after a report that US worker productivity fell for a third straight quarter in the spring of this year, shrugging off earlier losses on Friday’s jobs report and pressuring the dollar index.
The unexpected drop in US productivity may confirm the Federal Reserve’s fears that the economy could slip into a period of slow growth, reducing the central bank’s willingness to raise interest rates.
Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell for a second straight day on Tuesday.
Spot silver was up 1.6 percent at $20.15.
Soyabeans fall
CHICAGO: US soyabean futures fell on Wednesday, pressured by favourable crop weather and profit-taking after a five-session advance that was driven by resurgent export demand, analysts said.
Corn futures firmed, gaining against soya ahead of a key US government crop report due Friday, while wheat futures rose on hopes for fresh export business.
At the Chicago Board of Trade as of 12:40 p.m. CDT (1740 GMT), benchmark November soyabeans were down 10 cents at $9.78 per bushel.
December corn was up 1-1/2 cents at $3.34 a bushel and September wheat was up 5-1/4 cents at $4.22-1/4 a bushel.
Soyabeans fell on forecasts that added beneficial rains for the US Midwest this week and later in the month as the crop continues to set pods.
“It’s all tied to weather. You’ve got big rains coming here over the weekend and another big rain a week out. That is perfect growing weather for beans,” said Roy Huckabay with Linn & Associates, a Chicago brokerage.
The US Department of Agriculture through its daily reporting system confirmed sales of US soyabeans in each of the previous 10 trading sessions, although no new soya sales were reported on Wednesday. Corn futures firmed but remained rangebound as traders awaited the USDA’s monthly supply/demand reports on Friday, including the government’s first US corn and soya yield estimates based on field surveys.—Reuters
