Spot palladium tumbled further from its all-time high reached this week, posting the biggest drop in four months after crashing through $1 900 an ounce.
Palladium for immediate delivery plunged as much as 5.3%, and closed 4.2% lower at $1 856.57 in New York, the biggest decline since August 1.
“$1 900 acted as trigger to push the metal lower,” Fawad Razaqzada, a market analyst at Forex.com, said Friday by phone. “That level broke down and the metal dropped $60 below it in no time at all. Those kinds of moves are common in less-liquid markets.”
The metal reached an intraday record of $2 000.35 an ounce on Tuesday as an already squeezed supply deficit showed signs of expanding following power outages in South Africa, a key producing country. Palladium had gained as much as 59% this year.
“The ascent was too steep and I would be staggered if a load of stops had not been hit,” Rhona O’Connell, head of market analysis for EMEA and Asia at INTL FCStone, said in an email.
Futures for March delivery fell 4.8% to settle at $1 808.90 an ounce on the New York Mercantile Exchange after earlier trading as high as $1 918.60.
In other precious metals, gold futures declined the most in two weeks on the Comex in New York as the dollar and US equities advanced, erasing the metal’s weekly advance.
As the year draws to an end, the metal continues to trade within the week’s range of $11.50 an ounce as investors weigh near-record stock levels against global interest rates that remain low and reduce the impetus to buy or sell gold, George Gero, a managing director at RBC Wealth Management, said by phone Friday.
Platinum futures fell, with aggregate open interest topping 100000 contracts for the first time on record. Silver futures advanced.
© 2019 Bloomberg L.P.