Palladium retraces after breaching $1,550, gold awaits Fed

FE Team | Published: February 27, 2019 00:46:18

BENGALURU, Feb 26 (Reuters): Palladium retreated on Tuesday as investors took profits after the autocatalyst metal breached $1,550 for the first time due to a worsening supply scenario, while gold held a tight range ahead of US Federal Reserve chairman Jerome Powell's testimony.
Spot palladium, which traded as high as $1,554.50 per ounce earlier in the day, was down 0.5 per cent at $1,534 as of 1116 GMT.
At least 15 mining firms in South Africa, a major producer of the metal, have received notices of strikes to be held later this week, providing further impetus to its gains.
The metal has risen more than 21 per cent so far this year on a sustained supply deficit.
"There are increased talks that palladium is entering into the bubble territory because of the relentless rally that we have seen. Those who are long are tempted to take profits while we potentially may see a few attempts to sell some shorts in the market," Saxo Bank analyst Ole Hansen said.
Elsewhere, spot gold was barely changed at $1,326 per ounce and US gold futures were steady at $1,328.10 as the dollar remained subdued.
"The market is increasingly getting fed up, listening to the trade developments," Hansen said, adding that bullion was now looking for further direction from the stock markets and concrete developments in US-China trade relations.
On Sunday, US President Donald Trump decided to delay a steep tariff hike on Chinese goods, touting progress in weekend trade talks.
Impetus can now be expected from Fed chairman Jerome Powell's testimony on US monetary policy and the economy before the Senate Banking Committee, due later in the day.
"Powell could use the opportunity to move perceptions a little bit more towards the hawkish side. In such a case, we could see modest dollar strengthening set in over the course of his remarks, likely exerting more downward pressure on gold," said ANZ analyst Daniel Hynes.
Investors were also keeping a close eye on developments around Britain's exit from the European Union after reports that UK Prime Minister Theresa May was considering delaying the March 29 departure date.