Palladium prices rocketed on overnight as a lockdown in major producer South Africa exacerbated supply woes, while gold inched up as markets eyed US stimulus.
Deficit-hit palladium rose as much as 24.8 per cent earlier and was last up 19.3 per cent, at $US2,304.74 an ounce.
“Palladium is soaring on heightened supply concerns … (South Africa’s lockdown) will make an already tight supply situation much worse,” said Edward Moya, a senior market analyst at broker OANDA.
The auto-catalyst metal rose 10 per cent in the previous session on concerns of mine closures, though South Africa said on Wednesday it would continue to process platinum group metals during the lockdown.
Spot gold inched up 0.1 per cent to $US1,612 per ounce in volatile trade, after earlier hitting a two-week high. Prices surged as much as 5 per cent on Tuesday.
US gold futures settled 1.5 per cent lower at $US1,634.90 an ounce, a day after posting their biggest one-day jump since 2009.
“It’s very volatile because we have a coronavirus-hit gold market now, we’ve got supplies from three of the biggest refiners offline in Switzerland and gold is not in the right place where it is needed. So it’s creating a lot of nervousness,” said Saxo Bank analyst Ole Hansen.
The benchmark spot gold prices traded below US gold futures in a sign the market is worried that air travel restrictions and refinery closures will hamper shipments of bullion to the United States to meet contractual requirements.
US exchange operator CME Group on Tuesday announced a new gold futures contract to combat price volatility caused by the shutdown of gold supply routes, but traders and bankers said it would not immediately calm markets.
Investors were awaiting the US Senate’s vote later in the day on a $US2 trillion package to alleviate the economic impact of the coronavirus pandemic.
The virus has infected nearly 423,000 people, forcing lockdowns across the globe to combat its spread and has prompted countries and central banks worldwide to step in with policy aids.
Platinum jumped 4.4 per cent to $US739.09 an ounce, while silver rose 1.5 per cent to $US14.49.