eBusiness Weekly
Palladium touched a record peak on Wednesday after a Chinese official said the government was contemplating policies to increase domestic buying of automobiles, while gold regained upward momentum from a falling dollar.
Palladium gained 1,1 percent to $1,330.49 an ounce at 9.51am, having touched a record high of $1 342,43 earlier in the session.
The metal is likely to draw strength from a Chinese plan to introduce policies to boost domestic spending on items such as autos and home appliances this year.
“We are getting an idea that there is a potential trade deal between China and the United States and some internal stimulus within China,” said Bart Melek, head of commodity strategies at TD Securities.
“That ultimately means better consumption of vehicles in China and broadly in the emerging markets,” he said, adding that the increased demand comes at a point when the market is already very tight. The metal, used in emissions-reducing catalysts for vehicles, is trading at a premium to gold.
Spot gold rose 0,4 percent to $1 289,48 an ounce, while US gold futures increased 0,4 percent to $1,290.40.
“The dollar has been on the back foot this morning, which could be related to trade talks optimism and that’s given gold a nice reprieve,” said Tai Wong, head of base and precious metals derivatives trading at BMO.
The dollar index which measures the greenback against a basket of six major currencies, fell 06 percent, decreasing the cost of gold for holders of other currencies.
Meanwhile, Atlanta Federal Reserve Bank President Raphael Bostic said the central bank should let the economy “run for a while” before any further policy action.
Minutes of the Federal Open Market Committee’s December 18-19 policy meeting will be released at 2 pm, which investors will keenly eye for cues on future interest rate increases.
Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0,03 percent to 796,53 tonnes on Tuesday.
The holdings are still around their highest level since August last year. Silver rose 0,7 percent to $15,76 per ounce, while platinum rose nearly 1 percent to $822,50. — Reuters.
