Palladium At 17-Year High, Gold Eases

The palladium price surged to a fresh 17-year high at its fixing on Tuesday but gold prices continued to ease under pressure from a strong dollar.

Palladium was fixed at $245.50 per ounce, its highest price since March 1980, before an official fixing began.

It was last around current levels in June this year when it was fixed at $240.00 after leading exporter Russia had been out of the market for six months, citing administrative and personnel problems for being unable to sign new export contracts.

The lack of Russian metal -- it supplies around 60 per cent of world palladium needs and about 25 per cent of platinum demand -- severely limited availability, forcing consumers to use up inventories and sending dealers scrambling for metals.

Investment funds bought metal, further tightening supply, and doubts began to circulate about whether or not Russia had the material to export.

The latest surge began when it became clear that with Russia starting its exports last month, deliveries would be sporadic and market tightness would not go away.

The surging US dollar also ensured that prices would rise in domestic currencies.

Prices have risen by the daily limit four times in a row on the Tokyo's Tocom futures market and twice in successive days on the Nymex futures in New York as investors betting on lower prices were forced to cover or face further heavy losses. Its sister metal platinum also rose.

It was quoted at $460.00, up $12.00 from Monday.

Silver was firmer at $4.50/$4.51. Gold was the odd one out. Interest remained light and the price was under pressure.