Palladium Price Spikes on US-vs-BRICS Bullion Battle
Thursday, 10/24/2024 16:13
GOLD BULLION rallied but missed setting a new record price for the 1st time in 7 sessions on Thursday as the USA called on its G7 partners to tighten precious metals sanctions against major-mining producer Russia while Moscow proposed a new bullion exchange to its BRICS partners at the group's 2024 summit.
The price of palladium spiked by almost 10% after Bloomberg reported the US Treasury asking other major Western powers to sanction supplies of the precious metal from Russia – source of 2/5ths of global mine output – as well as titanium, vital to the aeronautics industry, in action to try hurting the Kremlin's ongoing war in Ukraine.
Russia's Ministry of Finance meantime proposed "
a mechanism for trading metals within the BRICS countries" with agreed "standards for the production and trade of bullion, accreditation of market participants [plus] clearing and auditing" – a role currently taken worldwide by London, UK.
Adding 6.4% for the day at this morning's London AM benchmark auction,
the price of palladium then rose a further 2.7% in spot market trade to hit $1168 per Troy ounce – its highest since December last year.
Russia's all-out
invasion of Ukraine in February 2022 saw palladium prices leap on Western sanctions to hit all-time highs above $3400 per Troy ounce. But since then it has faced
relentless and record levels of bearish palladium betting by speculators in derivatives exchange the CME's Nymex futures and options, thanks to its No.1 use – autocatalysts in gasoline engines – being projected to decline towards nothing as governments worldwide push targets for 'net zero' carbon emissions by 2030, 2050 or 2060.
Today's London 2pm benchmark palladium price put the precious metal almost 35% above August's 7-year low of $835.
"The transition to
a more just world order is not proceeding smoothly," said Russian President Vladimir Putin at the BRICS summit in Kazan, 700 kilometres east of Moscow, "retarded by forces accustomed to thinking and acting in the logic of
dominating everything and everyone."
But while "Russia planned to use the BRICS summit to split the world," said the Foreign Ministry in Kyiv overnight, "it has once again found that the world majority remains on the side of Ukraine" after China's leader Xi Jinping, Brazil's Lula da Silva and India's Narendra Modi called instead for
de-escalation and peace negotiations.
"We support dialogue and diplomacy, not war," said Modi at the BRICS event in Kazan, Russia.
Responding to Russia's 2022 invasion of Ukraine, the government of the UK – where the City of London provides the global palladium market's central trading hub, as it does for gold, silver and platinum – imposed trade tariffs on Russian platinum and palladium inflows of 35% that May,
hitting the cost but not banning imports.
But London's bullion market had already blocked new Russian supplies 1 month earlier, suspending the country's 2 state-owned platinum and palladium refineries from the LPPM's Good Delivery list of acceptable brands.
Last December palladium
jumped the fastest since March 2020's rebound from the Covid pandemic crash after the UK government hit Russian metals – but not palladium itself – with fresh sanctions.
Gold meantime rebounded from yesterday's surprise gold price plunge on weak US economic data, but it failed to top Wednesday morning's new all-time record high of $2758 and then erased that rally to trade little changed for the week so far beneath $2730 per Troy ounce.
Silver prices also rallied but fell back to last weekend's levels, trading at $33.65 per Troy ounce as the BRICS meeting broke up.
Palladium's sister-metal platinum – still finding its largest single use in diesel-engine autocats but more widely used in other technologies including
the growing hydrogen economy – rose to its highest in nearly 5 months at $1044 before dropping $20 to cut this week's gain to 1.6%.
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