Palladium up as biggest producers create trading bloc

Source: Dukascopy Bank SA
Precious metals except for silver advanced on Wednesday as ongoing political instability in Italy boosted safe-haven appeal of the commodity sector. Weaker US Dollar also supported the commodity group. Meanwhile, investors awaited the key data releases from the US due on Thursday.

Gold gained on political uncertainty in Italy. However, the upswing was capped by soft investment demand. Holdings in ETPs dropped 6.9% this quarter on talks that the Fed may halt its bond-buying programme. However, from the physical demand side, the yellow metal remained well-supported as Indian consumption is expected to increase further this year.

Silver declined for the second consecutive session to approach a three-week low despite robust investment demand and soft greenback.

Platinum and Palladium traded higher as investors continued to monitor news the two largest global producers, Russia and South Africa, have agreed to create a trading bloc to cooperate in the area of platinum and palladium exports. Meanwhile, a deficit on the physical markets and strong industrial demand also put an upward pressure on the metals.
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