Palladium slips from 3-1/2 year high, gold barely moves

SINGAPORE (Reuters) - Palladium fell from its highest level in more than three years on Wednesday as speculators reaped profits, but the metal used in jewellery and auto catalysts remains underpinned by a five-month strike in South Africa.

Thinly-traded palladium often tracks sister metal platinum, which has risen more than 7 percent this year on supply concerns. Impala Platinum, the world's second-largest platinum producer, said on Tuesday it had "exhausted all its financial means" in its wage offer.

FUNDAMENTALS

* Spot palladium eased $2.30 an ounce to $849.70 by 0019 GMT, having rallied to $854 on Tuesday, its strongest since February 2011.

* Spot gold was little changed at $1,259.50 an ounce, under pressure from recent rallies in equities.

* Platinum producer Lonmin may soon need to raise capital to survive South Africa's longest and costliest mining strike, which has paralysed its operations and slashed its revenue.

* Russian gold output rose by 29.7 percent in the first four months of 2014 compared with the same period in 2013 due to producers fighting lower prices with higher volumes, an industry lobby said on Tuesday.

MARKET NEWS

* A worldwide measure of stocks was little changed on Tuesday, while U.S. Treasury yields touched one-month highs and the euro fell as the prospect of higher U.S. interest rates began to take hold in markets.

* Brent crude reversed course to end down on Tuesday, while U.S. oil also fell due to a stronger dollar and profit taking by traders following strong gains on Monday.

(Reporting by Lewa Pardomuan; Editing by Richard Pullin)