Gold Reaches 7-Year Highs Above $1,600; New Palladium RecordPosted by On

By Barani Krishnan – Futures of gold hit seven-year highs above $1,600 an ounce Wednesday, extending Tuesday’s first break of that level in six weeks, as equity global markets shot up in a relief rally from an easing in China’s pandemic.

Palladium’s spot and futures prices, meanwhile, shot to new all-time peaks as worries about supply tightness in the autocatalyst metal — after a power crisis in major producing country South Africa — sparked long accumulation of investible products tied to the commodity.

“As traders anticipate a V-shaped recovery from the coronavirus, appetite for safe-haven assets still appears to be insatiable,” TD Securities said in a note. “Precious metals and Treasuries alike continue to see strong demand as a result.”

Gold futures for April delivery on New York’s COMEX settled Friday’s trade up $8.20, or 0.5%, at $1,611.80 per ounce. The session high of $1,614.25 was the highest since February 2013.

Spot gold, which tracks live trades in bullion was up 0.5% at $1,609.03 by 3:30 PM ET (20:30 GMT). Bullion earlier rose to $1,611.07, coming within cents of rewriting a January peak that would have given it a seven-year high, too.

“While the gold trade remains a crowded one, the average trader’s position size is still not excessive — which somewhat mitigates the risk of a rush to the exits,” TD Securities said in its note. “Indeed, a change in the market’s narrative would be required as gold positioning would need to decline through a swift decrease in the number of traders long.”

Palladium futures for March delivery on COMEX ended up $73.60, or 3%, at $2,571.20 after a record high at $2,755.90.

Spot palladium was up $44, or 1.7%, at $2,680, after peaking at $2,843.50.

Palladium prices are already up more than 45% year to date, compared to the 54% they gained during all of 2019.

Spot palladium is currently some $1,800 more expensive than sister metal platinum and about $1,200 costlier than gold.

“The madness on the palladium market continues,” Commerzbank (DE:CBKG) analyst Daniel Briesemann said. “Never before has the price gap between palladium and these two precious metals been so wide.”