Supply concerns push palladium to highest since July 2021

Palladium prices rose on Friday to a 7½-month peak on supply concerns, while safe-haven demand kept gold on course for a fourth weekly gain in five, after Russia attacked a nuclear power plant in Ukraine, the largest of its kind in Europe.

Spot palladium was up 0.4% at $2,785.59/oz at 4.30am GMT. Earlier in the session, it hit its highest since mid-July at $2,835.48/oz. Russia accounts for 40% of the global production of the autocatalyst metal used by automakers in catalytic converters to curb emissions. The metal has gained 18% so far this week in what could be its best weekly rise since March 2020.

“There are two other interesting factors (apart from war premium) driving this market into a complete big shortage,” said Stephen Innes, managing partner at SPI Asset Management. “The supply chain is one, but if we look at other commodity markets right now, there’s a buyer strike on virtually everything coming out of Russia. Palladium is no exception.”

Meanwhile, spot gold rose 0.2% to $1,939.67/oz and was on track for a weekly gain of about 3%. US gold futures climbed 0.3% to $1,941.10/oz.

“Reports that a fire has broken out at Europe’s largest nuclear plant in Zaporizhzhia have knocked the euro and seen a flight to safety into the yen and gold,” said Matt Simpson, a senior market analyst at City Index.

Governments, including those of the US and the EU, have imposed sanctions on Russian individuals, companies, banks and the Russian central bank since the Kremlin sent troops into Ukraine on February 24. Russia’s finance ministry said it was halting purchases of foreign currency and gold for this year.

Spot silver shed 0.1% to $25.13/oz, but was set for a fifth consecutive weekly gain, while platinum rose 0.6% to $1,086.54/oz.

Reuters