Leonhard Foeger | Reuters
Spot palladium fell 2.2 percent to $1,412.81 per ounce. 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. “Given the distance palladium had travelled since last year, this only just reflects a weak correction within a continuous strong uptrend.”
Palladium has shed more than $200 since scaling a record peak of $1,620.52 an ounce last week. It breached its 55-day moving average at around $1,453 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 inched down 0.3 percent at $1,304.80 per ounce, having touched a one-week low earlier in the session, mainly pressured by a firm dollar and stronger equity markets.
U.S. gold futures were down 0.4 percent at $1,304.40 an ounce.
“Gold is struggling because stock markets... are holding up reasonably well,” Saxo Bank’s Hansen said, adding that with the dollar drifting higher, “the trigger for a gold rally is simply not there”.
European stock markets firmed, while the dollar rose as rival currencies struggled following more dovish indications from central banks.
A stronger greenback makes dollar-denominated metals more expensive for holders of other currencies.
INTL FCStone said in a note that it remains cautiously optimistic on gold going forward, but added that a further breach of $1,300 could prompt those holding long positions, or bets on higher prices, to exit the market.
Silver edged 0.6 percent lower to $15.20 per ounce, while platinum fell 0.5 percent to $843.84.