IGI Logo

 Palladium jumped on Tuesday on concerns that Western sanctions against Russia over its invasion of Ukraine would hit supply, with the conflict also driving up prices of safe-haven gold.

Used by automakers for catalytic converters to curb emissions, palladium rose 3.6% to $2,577.38 by 1043 GMT. It hit its highest level since July 2021 at $2,711.18 last week.

"We're seeing the sanctions starting to bite," disrupting shipments and driving palladium's gains, Saxo Bank analyst Ole Hansen said.

Russia is the biggest producer of palladium, with Moscow-based Nornickel accounting for 40% of the metal's global mine production last year.

"Russian mining companies such as the world’s largest palladium producer are examining alternative transport routes. However, we believe that the sanctions and associated restrictions will make it difficult to charter planes to export materials," Commerzbank analysts said in a note.

Spot gold was up 0.7% at $1,921.90 per ounce. U.S. gold futures rose 1.2% to $1,923.30.

"Gold is reflecting that uncertainty remains quite elevated in the financial markets because of the geo-strategic risk posed by the events in Ukraine," ActivTrades senior analyst Ricardo Evangelista said.

European stocks inched lower as jitters over the Ukraine crisis weighed after ceasefire talks between Moscow and Kyiv failed to reach a breakthrough. [.EU]

Gold, considered a safe store of value during political and financial uncertainty, rose 6.5% in February and hit an 18-month high of $1,973.96 last week.

"We believe gold may experience price volatility in either direction due to potential tactical positioning but investment demand is likely to be supported longer term by high inflation, geopolitics and overall market pullbacks," said Juan Carlos Artigas, global head of research at the World Gold Council in a note.

Spot silver was up 0.8% at $24.62 per ounce, while platinum rose 1.2% to $1,055.50.