Palladium dives about 17% as Russia supply fears recede

  • Global shares rise on hopes for progress in peace talks
  • Gold down for second session in a row
  • US Treasury 10-year yields at highest since July 2019

March 14 (Reuters) – Palladium slumped nearly 17% in a sharp correction after rallying to an all-time high on the Ukraine crisis, as worries eased that supplies of the autocatalyst metal from top producer Russia may be hit.

Progress in Russia-Ukraine peace talks also drove a nearly 2% retreat in gold.

Palladium , used in car engine exhausts to reduce emissions, dipped 14.2% to $2,415.49 per ounce by 02:01 pm ET (1801 GMT), facing its biggest daily percentage drop in two years. It fell as much as 16.8% earlier in the session.

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Platinum dropped 3.6% to $1,040.29.

Russian mining giant Nornickel’s (GMKN.MM) biggest shareholder told Russian RBC TV that the group managed to secure alternative routes for its deliveries of palladium despite logistical issues.

“There’s been a sudden shift of expectations that there might not be much disruption with exports and that we could start to be seeing some demand destruction for the chip sector and auto manufacturers,” said Edward Moya, senior market analyst at OANDA.

Expectations that the peak in palladium may have already passed could also be driving this “excessive sell-off,” with prices likely to remain volatile in the short term, Moya added.

Palladium slumped nearly 17% in a sharp correction from a rally to an all-time high during the Ukraine crisis

Spot gold was down 1.4% to $1,957.57 an ounce. US gold futures settled 1.2% lower to $1,960.80.

Silver dropped 2.7% to $25.11.

“There are some potentially positive developments on the Russia-Ukraine war front and that has rallied equities markets and dented the metals markets,” Jim Wyckoff, senior analyst at Kitco Metals, wrote in a note. read more

Also pressuring non-yielding bullion, benchmark US 10-year Treasury yields jumped, as the Federal Reserve is expected to raise interest rates this week. read more

Despite a risk-on mood across markets, “I wouldn’t call this (the recent rally) the peak in gold just yet, because this (Ukraine) situation is still uncertain. It’s so fluid,” Julius Baer analyst Carsten Menke said.

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Reporting by Bharat Govind Gautam and Seher Dareen in Bengaluru; Additional reporting by Arpan Varghese; Editing by Richard Chang and Shailesh Kuber

Our Standards: The Thomson Reuters Trust Principles.

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