A worker watches as aluminum ingots pass along a conveyor belt after cooling in the foundry at the Krasnoyarsk aluminum smelter, operated by United Co. Rusal, in Krasnoyarsk, Russia.
Andrey Rudakov | Bloomberg | Getty Images
Palladium prices jumped to seven-month highs on Thursday as supplies worries intensified after Russia’s invasion of Ukraine, which also propelled gold to a near 18-month high as investors switched to safe-haven assets.
Russia launched an all-out invasion of Ukraine by land, air and sea on Thursday, confirming the worst fears of the West with the biggest attack by one state against another in Europe since World War Two.
Palladium climbed 5.7% to $2,622.43 an ounce at 1251 GMT from an earlier $2,695.57 an ounce, its highest since August last year.
“There are fears that palladium supplies from Russia could be disrupted,” said Commerzbank analyst Carsten Fritsch.
Traders say the market is worried that sanctions on Russia imposed by the United States and Russia could significantly tighten supplies of palladium used to make autocatalysts.
Russia’s Nornickel is the world’s largest supplier of palladium and a major supplier of platinum, accounting for about 40% and 10% of global mine production, respectively.
Palladium prices are up nearly 40% this year, while gold has gained more than 7%.
Spot gold jumped 2.7% to $1,959.36 per ounce, having earlier touched $1,973.96, its highest since September 2020. U.S. gold futures added 2.7% to $1,961.50.
“There is safe-haven demand for gold… this crisis is very inflationary because it’s adding upward pressure on commodities prices,” Saxo Bank analyst Ole Hansen said.
Gold is often used as a hedge against inflation, often caused by high oil prices, and as a means of preserving wealth during times of financial and political uncertainty.
Oil prices jumped above $105 a barrel for the first time since 2014 after Russia’s attack on Ukraine.
“A protracted escalation could see gold rising to or above $2,000 per ounce in the short-term,” UBS analyst Giovanni Staunovo said. “Platinum and palladium are supported on availability concerns.”
Silver surged 3.1% to $25.29 per ounce and platinum rose 1.4% to $1,106.66.
