Palladium Now at a 13-Year High, Russian Supply Concerns Pushing it Higher

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Palladium futures jumped to the highest since 2001 as supply concerns mounted amid prospects for further sanctions against Russia, the world’s biggest producer.

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The US and Europe are accusing Russia of escalating the five-month conflict in Ukraine by sending troops over the border to support rebels. Demand for palladium this year will exceed mine output by the most ever, according to London-based Johnson Matthey Plc, which makes a third of the world’s catalytic converters. A five-month labor strike crimped output in South Africa, the second-biggest source of the metal, helping boost prices 25 percent this year through yesterday.

“There is a lot of concern about palladium as imposition of more sanctions against Russia may affect supplies, which is already in a precarious state because of the strike,” Mike Dragosits, a senior commodity strategist at TD Securities in Toronto, told Bloomberg Businessweek in a telephone interview. “Palladium will continue to remain supported.”

Chinese palladium bar saw the biggest upwards shift for the day, rising 0.5 percent to close at CNY 194.00 ($31.48) per gram on Thursday, August 28. The price of Japanese palladium bar remained steady at JPY 2,982 ($28.70) per gram. At $883.00 per ounce, the price of US palladium bar was essentially unchanged.

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The price of Chinese platinum bar remained essentially flat at CNY 299.00 ($48.52) per gram. The price of US platinum bar flattened at $1,400 per ounce after two days of downward movement. The price of Japanese platinum bar steadied at JPY 4,772 ($45.93) per gram following two-days of increases.

Chinese gold bullion stayed flat at around CNY 254.90 ($41.37) per gram. The price of Indian gold bullion flattened at INR 28,002 ($463.78) after two days of improvement. The price of US gold bullion showed little movement on Thursday at $1,281 per ounce. The price of Japanese gold bullion ended a two-day climb, settling at JPY 4,286 ($41.26) per gram.

After a 0.3 percent increase, Indian silver finished the day at INR 42,838 ($709.50) per kilogram. Chinese silver gained 0.2 percent to finish at CNY 4,205 ($682.41) per kilogram. The price of Japanese silver held steady at JPY 650.00 ($6.26) per 10 grams. US silver held its value yesterday at $19.36 per ounce.

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