Palladium zoomed past $1,900 an ounce for the first time ever on Tuesday as a power crisis halted production at mines in major producer South Africa, exacerbating concerns over supply and extending the autocatalyst's record run.
Spot palladium was up 1% at $1,901.27 an ounce, after hitting an all-time high of $1,903 by 12:03 p.m. (1703 GMT).
"South Africa produces 40% of world's palladium and the ESKOM outages are hitting some mines, giving palladium just that extra nudge above $1,900," said Tai Wong, head of base and precious metals derivatives trading at BMO.
"We've now had 13 consecutive positive sessions, which seems a little rich, so it wouldn't be surprising to see some consolidation, though the overall trend continues to look quite positive."
Mines across South Africa are shutting down after flash flooding caused the largest power blackouts in more than a decade, with major miners Harmony Gold, Impala Platinum, and Sibanye-Stillwater all being forced to cut production.
Scarcity concerns surrounding palladium have already helped the metal rise about 50% in 2019, owing to its large demand in the auto sector.
Other metals also gained on the outages in South Africa, with platinum up 3.1% at $922.40 an ounce, the highest since Nov. 21. Silver rose 0.4% to $16.66.
Gold got a further lift form uncertainties surrounding US-China trade talks ahead of a Dec. 15 tariff deadline and a weaker dollar.
Spot gold rose 0.1% to $1,463.66 per ounce. US gold futures was up 0.2% at $1,468.10.
"Gold is riding higher on dollar weakness and caution ahead of a looming tariff deadline," said FXTM analyst Lukman Otunuga.
A Wall Street Journal report said trade negotiators from both sides were planning for a delay of the December tariffs.
Gold pared gains on the report, but remained supported as doubts over a phase-one deal persisted.
"In the short-term, if the Fed shifts to a more hawkish assessment, gold is at risk from further repositioning. Technically this could pull prices back to $1,410/oz," UBS analysts said in a note.
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