BENGALURU: Gold rose to its highest in more than five weeks on Tuesday as the dollar sagged after the United States and China agreed a 90-day pause on fresh trade tariffs, while palladium hit a record high, leaving it about $4 short of parity with bullion.
Palladium rose more than 2 per cent to $1,231.50 per ounce by 1310 GMT, after scaling an all-time high of $1,235.
“The market is structurally in a significant deficit, so there are clearly concerns about that. We’ve got a lot momentum and positive investor sentiment flowing into the market at the moment,” said Capital Economics analyst Ross Strachan.
The metal, used mainly used in emissions-reducing auto catalysts for vehicles, has gained about 48pc since mid-August, but not all analysts think the price is justified.
“The high price premium on palladium is not justified in our opinion because car sales have been fairly weak on all key markets of late,” Commerzbank analysts said in a note. “What is more, US tariffs have been threatened on imports of cars and car parts from the European Union.”
Palladium’s 14-day relative strength index (RSI) was around 77. An RSI above 70 indicates a commodity is overbought and could lead to a price correction.
Meanwhile, spot gold rose for the second straight session, up 0.6pc at $1,238.90. Prices touched $1,241.10 earlier in the session, their highest since Oct. 26. Among other precious metals, spot silver rose 1pc to $14.52 per ounce, while platinum dipped 0.4pc to $803.50.
Published in Dawn, December 5th, 2018
Dear visitor, the comments section is undergoing an overhaul and will return soon.