London Palladium Fixes Lowest Since 1993
The rare metal, used primarily in electronics and the motor industry, fixed at $123.00 an ounce, $1 below its previous fixing and its lowest level since December 29, 1993.
It looks absolutely terrible, a dealer said, adding that the greyish-white metal could fall to $110 per ounce in coming weeks.
Palladium shed about $2 an ounce on Tuesday afternoon after investment funds and speculators started liquidating positions in the New York futures market, dealers said.
They attributed the sell-off to the cumulative effect of bearish influences, rather than a specific market-moving factor.
The metal has been trending lower since rallying to around $145 an ounce in February, in line with rallies and subsequent declines in gold, silver and platinum.
A steady drip of selling has been seen from Russia, the world's largest producer, during the slack summer season when European industry was closed and demand was low, dealers said.
A fall in Japanese electronics industry demand earlier this year also led to lower palladium imports, analysts said. Palladium is used in computers, mobile phones and automotive electronics.
The problem had been a build-up in inventory at the end of 1995, prompting manufacturers to scale back production in the first part of 1996, said Alison Cowley, a market research analyst at refiner Johnson Matthey.
Now obviously that will have an impact upon palladium demand in capacitors and I think we're seeing that impact in the decline in palladium imports into Japan, she said.
Gold remained vulnerable to further losses, however, after tumbling below its $385 support level early in the week.
It's just taking a breather on the way down, one dealer said.
The next key support level is $380, and then around $375.
The gold market was also watching for the Friday meeting of the International Monetary Fund board for news of the proposed sale of some IMF gold reserves to aid poor countries.
But several analysts have said that if the sale were approved, it should have no effect on the price of gold because the volume would be small and spread out over several years.
Silver was down two cents from Tuesday's London close at $5.09 an ounce. Platinum, the sister metal of palladium, was a touch easier $392.75, down $0.75.