Platinum plunged more than 5% and gold shed 2% on Monday, leading a sharp decline across precious metals driven by a soaring dollar, with deficit-hit palladium too giving up some gains from a record rally that saw it breach $1,700 per ounce. Silver slid more than 3% to its lowest in more than a month.
Spot palladium eased 0.6% to $1,670.45 an ounce by 02:23 pm EDT (1823 GMT), having earlier touched a record high of $1,700.71. The metal has risen about 9% this month. "There is strong fabrication demand but a good part of this is speculative demand from investors who expect prices to rise and also people who are getting out of gold, silver and platinum because those prices are falling, some of them are shifting into palladium," said Jeffrey Christian, managing partner of CPM Group.
The price of palladium, used mainly in emissions-reducing catalysts for vehicles, has risen about 33% this year and nearly 9% this quarter, despite a weakening auto sector, due to tight supply. Meanwhile, gold shed 1.7% to $1,471.09 after the dollar hit multi-year highs, making the dollar-denominated metal more expensive for holders of other currencies. Earlier, prices fell about 2% to their lowest since August 6 at $1,463.99, with bullion also marking its first monthly decline in five. For the quarter, however, bullion has risen more than 4% so far. US gold futures for December settled down 2.2%, at $1,472.90.
"Gold and silver ... continue to decline on a slightly firmer dollar and a relatively uneventful geopolitical landscape," INTL FCStone analyst Edward Meir said in a note. Also weighing on gold, stocks firmed after Washington's dismissal of a report from Friday, which had said the US administration was considering delisting Chinese companies from US stock exchanges. Investors also kept a close eye on the US Federal Reserve's monetary policy. The central bank cut interest rates earlier in September for the second time this year.
Elsewhere, platinum dropped 5.6% at $878.86, having slumping to its lowest since August 28 at $870.5 earlier. Silver shed about 2.9% to $17.04 after touching a more than one-month low of $16.89. However, both metals are up about 5.4% and 11.4% for the quarter respectively.
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