Palladium rose to its highest level in 11 months on Wednesday, while gold took a breather after a fund-led rally pushed the metal to a one-week high.
Platinum, a precious metal mainly used in jewellery and in car catalytic converters, moved closer to a recent 25-1/2 peak. Silver also gathered strength in line with other metals.
Spot gold was at $471.40/472.20 an ounce by 0934 GMT in European trade, down from $472.20/473.00 last quoted in New York on Tuesday, when it rose more than $7.
“There was a wave of new money coming into the commodities complex,” said Jeremy East, global head of precious metals at Commerzbank. “This trend will probably continue.”
He said relatively less liquid metals such as platinum and palladium could move dramatically higher with a comparatively lower investment, but noted a rise in physical demand.
“The fact that we are moving back to these levels again tells us the market wants to go up. I am still bullish and gold will soon re-test $475, maybe tomorrow,” said one dealer in Singapore.
Some dealers said gold was gaining strength on worries about inflation and the U.S. economy. Gold rose to a near-18-year high at $480.25 two weeks ago before profit-taking kicked in.
“My concern would be that speculative position is getting very very long, but in the short term it does look that momentum is higher rather than lower,” said a European metals analyst.
PALLADIUM, PLATINUM GAIN
Gains among other precious metals inspired fund buying in thinly traded palladium, a metal used in jewellery and auto catalysts. Spot palladium rose as high as $217 before easing to $216/219 an ounce.
It was traded at $213/217 an ounce late in New York on Tuesday.
Some dealers were bullish on palladium on the prospect of more demand in China, where many jewellers have abandoned pricey sister metal platinum in favour of palladium.
“Gains in Tokyo are supporting the price. We saw some buying in Asia because people think jewelers and auto makers are using more palladium,” said one dealer in Tokyo, who pegged the upside target at around $220.
The benchmark palladium August contract on the Tokyo Commodity Exchange rose 26 yen per gram to 806 yen.
Platinum rose to $941 an ounce but declined to $939/943. It was quoted in the U.S. market at $936/939.
Silver rose to $7.80/7.83 an ounce from $7.78/7.81 in New York.