Gold Trades Below 4-Month High as Palladium Near Highest in Year
London (Mar 7) Gold traded below a four-month high in London as investors weighed turmoil in Ukraine and awaited U.S. jobs data. Palladium fell, after reaching the highest price in almost a year on concern supplies may be restricted.
The U.S. and European Union put Russian President Vladimir Putin on notice that they’ll be united on imposing sanctions if he’s unwilling to defuse the Ukraine crisis and pursue a negotiated solution. Gold headed for a fifth weekly advance before the release of U.S. payrolls data, with Federal Reserve officials reiterating the threshold for changing its stimulus tapering is high.
Bullion rallied 12 percent this year, rebounding from the biggest annual drop since 1981, as concern that the U.S. recovery may be faltering and recent turmoil in Ukraine boosted demand for a haven. Palladium headed for the longest run of weekly gains since 2012 on concern that supplies from Russia and South Africa, the biggest producers, may be disrupted.
“It’s a very nervous market, it’s very unclear what’s going to happen with Ukraine,” Afshin Nabavi, a senior vice president at bullion refiner MKS (Switzerland) SA in Geneva, said by phone. “I would expect buying on dips. Everyone’s waiting for the non-farm payrolls.”
Bullion for immediate delivery lost 0.2 percent to $1,348.69 an ounce by 9:32 a.m. in London. It reached $1,354.87 on March 3, the highest since Oct. 30, and rose 1.7 percent this week. Gold for April delivery fell 0.2 percent to $1,348.70 on the Comex in New York, where futures trading volume was 16 percent below the average for the past 100 days for this time of day, data compiled by Bloomberg showed.
Political Standoff
U.S. President Barack Obama signed an order authorizing financial sanctions, while EU leaders halted trade and visa talks with Russia and threatened punitive economic measures in what’s become the worst rift between Russia and the West since the Cold War era. The standoff can be resolved diplomatically, through talks between Russia and Ukraine’s government, Obama told Putin, the White House said.
Lawmakers in Crimea voted in a non-binding measure to become part of Russia if voters agree in a referendum March 16.
“As long as the situation in Ukraine remains, gold will get safe-haven bids,” Zhu Siquan, an analyst at GF Futures Co., a unit of the Guangzhou-based firm that bought Natixis Commodity Markets Ltd., wrote in a note. “People are waiting for the jobs data to gauge the economy in the U.S.”
Holdings in gold-backed exchange-traded products rose 6.9 metric tons yesterday, the most in three weeks, to 1,752.2 tons, data compiled by Bloomberg show. Assets reached the lowest since October 2009 last month as the Fed has reduced bond buying.
Precious Metals
Silver for immediate delivery fell 0.6 percent to $21.3532 an ounce. Platinum declined 0.4 percent to $1,480 an ounce, after reaching $1,488.13, the highest since Sept. 9. Palladium slipped 0.8 percent to $774.65 an ounce. It touched $783.54, the highest since April 1, and advanced 4.3 percent this week. A fifth weekly gain would be the longest run since December 2012.
Russia accounted for about 40 percent of palladium mine supply last year and South Africa 37 percent, London-based Johnson Matthey Plc estimates.
“Between South Africa and Russia, you’ve got pretty much most of palladium production,” Nabavi said. Concerns about supply being curbed in the countries has helped prices, he said.
The union leading a strike at the world’s largest platinum mines said it won’t back down on its demands over pay after talks to end the dispute collapsed. The Association of Mineworkers and Construction Union, which has been on strike for six weeks, marched on South African government offices in Pretoria yesterday in support of its demand for higher wages.
Source: Bloomberg
