Palladium and gold rise as sanctions cranked up on Russia

Bengaluru — Palladium jumped about 6% on Monday as fresh Western sanctions on Russia raised supply concerns for the autocatalyst, while gold rose more than 1% as safe-have demand was buoyed by President Vladimir Putin putting Russia's nuclear deterrent on high alert.

Palladium was up 5.1% at $2,486.64 at 5.35am, after scaling its highest since July 2021 at $2,711.18 last week, and is set for a third consecutive monthly rise.

The US and its allies on Saturday moved to block certain Russian banks' access to the SWIFT international payment system, which traders and analysts said could disrupt Russian exports of all commodities from oil and metals to grains.

President Vladimir Putin put Russia's nuclear deterrent on high alert on Sunday, the fourth day of the biggest assault on a European state since World War 2.

“There's just real concern here that shipping channels are just going to get disrupted because of this Ukraine situation,” said Stephen Innes, managing partner at SPI Asset Management.

“It's not necessarily the short-run spike that really weighs negatively but more of the how long this is going to last.”

Russia's Nornickel is the world's largest supplier of palladium, used by automakers for catalytic converters and to clean car exhaust fumes.

Spot gold climbed 1% to $1,906.11 per ounce, rising about 6% so far this month in what would be its best monthly gain since May 2021.

US gold futures advanced 1.1% to $1,909.00. Western sanctions on Russia were substantially enhanced over the weekend, leading to a risk-aversion sell-off in markets at the Asian open, and resulting in a spike for safe-haven demand for gold, Jeffrey Halley, a senior market analyst at Oanda, said in a note.

Gold is often used as a hedge against inflation and as a means of preserving wealth during times of financial and political uncertainty.

Spot silver rose 0.3% to $24.26 per ounce and platinum was up 0.2% at $1,055.85, with both poised for monthly gains.

Reuters