Gold, Palladium put the brakes on after a stellar rally
Gold and palladium hit the brakes on a blistering rally on Wednesday as riskier assets attempted a comeback, with analysts predicting another run for the precious metals in the face of further escalation in the Ukraine crisis.
Spot gold fell 1.9 per cent to $2,013.79 an ounce as of 1047 GMT, breaking a four-session rally to hit an all-time high in August 2020. US gold futures fell 1.1 per cent to $2,021.20.
“What we are seeing now is just a small correction after such a big move over a long period of time (in gold and palladium),” said Craig Erlam, senior market analyst at OANDA.
Investors picked up beaten-down stocks as major equity indices rebounded after a recent rout on fears about mounting Western sanctions on Russia to invade Ukraine.
The firming up of crude oil prices, which have prompted inflationary fears and ignited the appeal of gold as a hedge against rising costs, also backtracked.
A strong resistance can be expected in gold prices near these higher levels. A pullback near $1,930 is likely, with some consolidation between $1,930 and $2,075, said Michael McCarthy, chief strategy officer, Tiger Brokers, Australia.
“But if the current volatility in geopolitical terms continues, it is very likely that we will seek new all-time highs for the precious metals,” McCarthy said.
Palladium, used by automakers in catalytic converters to curb emissions, fell 3.7 percent to $3,063.19 an ounce after hitting a record high of $3,440.76 on Monday, triggered by disruptions in supplies of the metal from top producer Russia. inspired by apprehension.
Natixis analyst Bernard Dahda said the recent volatility in the precious metals could be seen as usual as commodities are not following fundamentals or industrial demand.
After touching a nearly nine-month high on Tuesday, spot silver fell 1 per cent to $26.13 an ounce. Platinum fell 3.5 per cent to $1,113.43.