LONDON – Palladium and platinum rose sharply on Wednesday as bets on lower prices were reversed in thin conditions after the metal broke above key chart levels, while gold rose as weak U.S. data weighed on the dollar.
Palladium surged overnight in Asia, hitting 14-month highs. Traders said a wave of short covering was likely triggered after the metal broke above $700 an ounce, and then above last week’s 14-month peak of $723 an ounce.
Spot palladium was up 4.75 percent at $726.97 ounce at 1511 GMT, having risen as high as $746.10 an ounce in Asian trading hours. The move was likely to have been exacerbated by thin liquidity, analysts said.
Palladium, used in catalytic converters in cars, climbed nearly 20 percent last month in its biggest one-month rise in 8-1/2 years. That may mean investors who had bet on lower prices could be exposed to heavy losses.
“(Commodity) prices today are being supported by a combination of short covering and a weak dollar. Many people were a few positions short and you saw a lot of trying to cover that,” Marex Spectron’s head of precious metals David Govett said.
Gold, often perceived as a hedge against economic and financial risk, was 0.84 percent higher at $1,351.50 an ounce.
For the rest of this article, click here: http://in.reuters.com/article/global-precious-idINKCN10J0B9