Investing.com - The tight supply in the world's costliest metal just got a little tighter.
Palladium hit record highs for the second time in less than a week on Monday on strike threats at South African mines. The push higher widened palladium's premium against gold. Gold moved lower Monday after President Donald Trump's suspension of further U.S. tariff hikes on China removed a major support base for the safe-haven.
"Palladium highs (are) taking interest away from gold for now," George Gero, analyst at RBC Wealth Management in New York, wrote in his daily commentary on precious metals.
The spot price of palladium was up $39.05, or 2.6%, at 1,538.05 per ounce by 2:33 PM ET (19:33 GMT), after hitting $1,539.70 earlier, easily surpassing Wednesday's peak of $1,506.65.
Futures of palladium settled up $34.40, or 2.4%, at $1,494.50 per ounce on the Comex division of the New York Mercantile Exchange.
Palladium, which helps purify gasoline engines' emissions and serves as a catalyst for their running, has jumped over 80% in value since mid-August on shrinking mine output in South Africa, the major producing country. Palladium is part of the Platinum Group Metals (PGM) asset class, which contains platinum, the purifying agent and catalyst for diesel engines. Unlike palladium, the supply of platinum is more assured, prompting it to trade at lower prices to its sister metal.
Worries about another supply squeeze in palladium grew on Monday as Reuters reported that at least 15 mining companies in South Africa, home to 90% of the world's PGM deposits, received strike notices next week from unions supporting workers who had downed tools at the Sibanye-Stillwater mines over wage and job cut disputes.
"The fundamental issue with palladium is any strike will drive prices through the roof because there is a shortfall with normal production," Miguel Perez-Santalla, vice president at New York's Heraeus Metal Management, was quoted saying by Reuters.
Spot gold, reflective of trades in physical bullion, was down 2 cents at $1,328.14 per ounce.
On Comex, Gold futures for April settled down $3.30, or 0.3%, at $1,329.50 per ounce.
Gold slid as Trump announced he would delay the imposition of more tariffs on Chinese imports beyond an original March 1 deadline. The president also said he planned an eventual meeting with China's President Xi Jinping to conclude an agreement. Chinese state news agency Xinhua, however, warned that there could be “new uncertainties” to finding a resolution to the protracted trade war between the two countries.
Gold prices also consolidated ahead of Federal Reserve Chairman Jerome Powell's semi-annual testimony before a Congressional panel on Wednesday that will offer a glimpse of the central bank’s thinking on interest rates amid winds of change in the global economy.
Minutes from the Fed’s latest policy meeting, released last week, revealed a unanimous vote to pause rate hikes because of worries about slowing U.S. and global growth.
Trades in other Comex metals as of 2:33 PM ET (19:33 GMT):
Platinum futuresup $9.45, or 1.1%, at $855.35 per ounce.
Silver futures down 5 cents, or 0.3%, at $15.86 per ounce.
Copper futures up 0.4 cent, or 0.1%, at $2.95 per pound.