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Palladium Peaks Again; Gold Near Monthly High Before Retreating

Published 03/21/2019, 03:47 PM
Updated 03/21/2019, 04:08 PM

By Barani Krishnan

Investing.com - The palladium bull remains irrepressible, but the gold bug is having trouble staying on the bronco as the U.S. labor market lends a modicum of support to a dollar all but forsaken by the Fed.

The spot price of palladium, an auto-catalyst metal, shot to record peaks for a fourth-straight day on Thursday, its third above the key $1,600 level.

Spot palladium was up $5.60, or 0.4%, at 1,600.10 per ounce by 3:34 PM ET (19:34 GMT), after setting an all-time high at $1,616.30. The silvery-white metal has benefited all week on speculation of continued scarcity in the commodity, which is produced mainly in Russia and South Africa.

The Federal Reserve's reassurance of a benign interest rate regime in the U.S. through 2019, communicated through its decision on not to raise rates again in March, battered the dollar on Wednesday and added froth to in the gold and palladium markets.

Palladium futures, traded on the Comex division of the New York Mercantile Exchange, settled down $2.50, or 0.2%, to $1,557.90 per ounce after a peak at $1,576.60.

Gold also rallied early in the day, notching a month's high above $1,300 in early trade, but it fell back as the dollar bolted up on data showing the number of Americans filing applications for unemployment benefits fell more than expected last week.

The dollar index, which measures the greenback against a basket of six currencies, rose by 0.8% to 95.947 by 3:35 PM ET (19:35 GMT). The dollar was also bolstered by another report indicating a sharp rebound in factory activity in the mid-Atlantic region this month from heavy falls earlier.

Spot gold, reflective of trades in physical bullion, was down $3.81, or 0.3%, to $1,308.74 per ounce after scaling $1,320.95 earlier, its highest since Feb. 26. Comex gold futures for April delivery settled the official trading session down $5.60 at $1,307.30 per ounce.

Some fund managers said they were staying off gold for now.

"We got out of our GLD position," said Matthew Tuttle, founder of Riverside, Conn.-based Tuttle Tactical Management, which had about 3% of its $600 million assets in the world's leading gold exchange-traded fund, the SPDR Gold Shares (NYSE:GLD), before liquidating that position.

"I wouldn't say we are necessarily bearish on gold, but I expect to see more weird divergences like today where both the dollar and gold are vying for investor attention. Hereon, I see gold bumping around in a range of $1,300 and $1,350," Tuttle added.

Spot gold's high for this year was just shy of $1,350, reached on Feb. 20.

Trades in other Comex metals as of 3:30 PM ET (19:30 GMT):

Platinum futures up $2, or 0.2%, at $861.60 per ounce.

Silver futures up 15.5 cents, or 1%, at $15.47 per ounce.

Copper futures down 1 cent, or 0.3%, at $2.91 per pound.

Latest comments

I think gold will fall before rally
"We got out of our GLD position,". . With regards to this particular gold fund, anyone know why there is a clause in the GLD prospectus that states GLD has no right to audit subcustodial gold holdings? Why would the organizations behind GLD forfeit this right and create such a glaring audit loophole? I have not heard a single good reason for the existence of this loophole thus far. It also doesn't help that GLD claims to be fully backed by physical gold bullion but yet it refuses to give retail investors the right to redeem for any of these ‘claimed’ gold bullion.. . I remember there was a well documented visit by CNBC's Bob Pisani to GLD's gold vault. This visit was organized by GLD's management to prove the existence of GLD's gold but the gold bar held up by Mr. Pisani had the serial number ZJ6752 which did not appear on the most recent bar list at that time. It was later discovered that this "GLD" bar was actually owned by ETF Securities.
A very pertinent question that needs follow up.Thanks, Brad.
"the SPDR Gold Shares (NYSE:GLD)". . Speaking of this particular gold fund, why is there a clause in the GLD prospectus that states GLD has no right to audit subcustodial gold holdings? The GLD managing organizations sure went out of their way to create this glaring audit loophole. What is the purpose of this loophole? More importantly, the GLD organizations promise that this fund is 100% backed by actual physical gold but yet they staunchly deny retail investors the right to any of their promised physical gold. . . CNBC's Bob Pisani also made a highly publicized visit to GLD's gold vault in a segment called Gold Rush: The Mother Lode. GLD's administration organized this visit to show that GLD's gold actually exists. However, the gold bar held up by Mr. Pisani showed a serial number of ZJ6752 which did not show up on the latest bar list during that time. It was later found that this "GLD" bar actually belonged to ETF Securities.
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