Palladium retreated on Tuesday on profit-taking after the autocatalyst metal breached $1,550 for the first time due to a worsening supply scenario, while gold held in a tight range ahead of U.S. Fed chairman Jerome Powell’s testimony.
Spot palladium, which traded as high as $1,554.50 per ounce earlier in the day, was down 0.3 percent at $1,536.70 as of 1343 GMT.
At least 15 mining firms in South Africa, a major palladium producer, have received notices of strikes to be held later this week, providing further impetus to its gains.
The metal has risen more than 21 percent so far this year on a sustained supply deficit.
“There are increased talks that palladium is entering into the bubble territory because of the relentless rally that we have seen,” Saxo Bank analyst Ole Hansen said. “Those who are long are tempted to take profits while we potentially may see a few attempts to sell some shorts in the market.”
Elsewhere, spot gold was barely changed at $1,326.40 per ounce and U.S. gold futures were steady at $1,328.50 as the dollar remained subdued.
“The market is increasingly getting fed up, listening to the trade developments,” Hansen said, adding that bullion was now looking for further direction from the stock markets and concrete developments in U.S.-China trade relations.
On Sunday, U.S. President Donald Trump decided to delay a steep tariff hike on Chinese goods, touting progress in weekend trade talks.
The next potential impetus for the market will be Fed chairman Powell’s testimony on U.S. monetary policy and the economy before the Senate Banking Committee later in the day.
“Powell could use the opportunity to move perceptions a little bit more towards the hawkish side. In such a case, we could see modest dollar strengthening set in over the course of his remarks, likely exerting more downward pressure on gold,” said ANZ analyst Daniel Hynes.
“As long as geopolitical risks, concerns over plateauing global growth and speculation over the Fed taking a pause on rate hikes remain key themes, gold is insulated from extreme downside shocks,” Lukman Otunuga, research analyst at FXTM, said in a note.
Silver fell 0.2 percent to $15.86 per ounce, while platinum was up 0.2 percent to $850.34, having touched $857.50, its highest since early November.
