Palladium rose on Wednesday, extending gains after hitting a seven-month peak in the previous session as the Russia-Ukraine crisis worsened, while gold fell after the dollar strengthened.
Auto-catalyst metal palladium jumped 3% to $2,656.74 as of 0803 GMT. Russia accounts for 40% of palladium production globally.
"The kind of shortages or price jumps we've seen in vehicles around these supply-chain and shipping disruptions, not surprising that palladium was already edging higher," said Ilya Spivak, a currency strategist at DailyFX.
The war and the sanctions imposed by Western nations on Russia significantly cut off access to Russian palladium supply, Spivak said. "There's a risk premium and supply disruption element that's being factored in here."
Ukraine's besieged cities were bracing for more attacks on Wednesday, as Russian commanders facing fierce Ukrainian resistance intensify their bombardment of urban areas in a push toward the capital Kyiv.
The steady drum beat of U.S. companies taking a stance increased as rockets struck major cities in Ukraine.
Spot gold was down 0.2% at $1,940.26 per ounce. U.S. gold futures rose 0.3% to $1,949.40.
The dollar index rose to touch a fresh 20-month high, making gold less attractive for holders of other currencies.
Investors now await Federal Reserve Chairman Jerome Powell's testimony before the U.S. Congress for more clarity on interest rate hikes.
"If we find out mid-month that from the Fed's perspective, the current situation is not going to change their overall strategy, that they're still focused on containing inflation -you're going to see gold snap back lower in a significantly sharp move," Spivak added.
Holdings of the world's largest gold-backed exchange-traded fund, SPDR Gold Trust, rose to 1,042.38 tonnes on Tuesday — the highest since July 2021.
Spot silver fell 0.8% to $25.16 per ounce, while platinum rose 0.4% to $1,057.94.
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