March 28, 2019 / 12:07 PM / 7 months ago

PRECIOUS-Palladium slumps 6 pct as slide from record high gathers steam

* Palladium hits low of $1,356.75/oz, weakest since Feb. 4

* Prices now down more than $250/oz from last week's record high

* GRAPHIC-2019 asset returns: tmsnrt.rs/2jvdmXl (Updates prices, adds comment)

By Sumita Layek

March 28 (Reuters) - Palladium fell nearly 6 percent on Thursday, extending the previous day's sharp losses as concerns that an economic slowdown could dent demand and a weak technical picture pushed investors to book profits after a record run.

Spot palladium fell 5.5 percent to $1,364 per ounce by 1347 GMT, having earlier hit a seven-week low of $1,356.75.

The autocatalyst metal marked its biggest daily percentage loss in over two years in the last session, with prices plummeting 6.3 percent as investors booked profits.

"(The price rally) has been very speculative-driven and with the technical outlook changing somewhat after the break below $1,500, we're seeing the speculative interest being reduced," said Saxo Bank analyst Ole Hansen.

"From a technical perspective, the next major level is another $100 lower at $1,316," he added.

Palladium has shed more than $250 since scaling a record peak of $1,620.52 an ounce last week. It breached its 55-day moving average at around $1,452 an ounce for the first time since August on Wednesday.

"With the concerns around economic growth and a stronger dollar, investors took profits after the strong rally we've had in the past few weeks," ANZ analyst Daniel Hynes said.

He added however that while worries about demand had emerged, supply constraints remained greater.

Remarks by Anglo American Chief Executive Mark Cutifani, who said palladium was a "bubble", also led to palladium's sharp sell-off, analysts said.

Meanwhile, spot gold prices dipped 1.4 percent at $1,291.84 per ounce, falling below the key $1,300 level, mainly on a firm dollar. Prices touched a more than two-week low earlier in the session.

U.S. gold futures were down 1.3 percent at $1,293.80 an ounce.

"The lack of a bullish tailwind following last week's uber-dovish Federal Open Market Committee statement and the subsequent drop in bond yields are short-term concerns," Saxo Bank's Hansen said.

"With the uptrend from early March and the 50-day moving average both broken, the risk of a deeper correction has emerged."

Prices broke below the 50-day moving average at about $1,307. Speculators who trade on technical signals regard a break below key moving averages as a bearish sign.

The dollar rose as rival currencies struggled following more dovish indications from central banks, making dollar-denominated metals more expensive for holders of other currencies.

INTL FCStone said in a note that a breach of $1,300 could prompt those holding long positions, or bets on higher prices, to exit the market.

Silver edged 1.5 percent lower to $15.05 per ounce, while platinum fell 1.6 percent to $834.64. (Reporting by Sumita Layek and Swati Verma in Bengaluru; Editing by Jan Harvey)

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