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PRECIOUS-Palladium rises to fresh 13-1/2 year high; gold eases
August 29, 2014 / 10:30 AM / 3 years ago

PRECIOUS-Palladium rises to fresh 13-1/2 year high; gold eases

* Palladium rises above $900 on supply worries
    * Russian supplies to drop 2 pct this year - GFMS
    * Gold down as dollar rises, S&P higher
    * Coming up: U.S. construction spending Tuesday

 (Adds comment, NEW YORK to dateline, second byline, updates
market activities)
    By Frank Tang and Jan Harvey
    NEW YORK/LONDON, Aug 29 (Reuters) - Palladium rose to a
fresh 13-1/2-year high on Friday on worries over uncertain
supplies from Russia, the world's largest producer of the metal,
while gold prices eased on a dollar rise and gains in U.S.
equities.
    Tensions rose after Ukraine called for full membership in
NATO, its strongest plea yet for Western military help after
accusing Russia of sending in armoured columns that have driven
back its forces in support of pro-Moscow rebels. 
    Supply of autocatalyst metal palladium from Russia is
expected to fall 2 percent this year, GFMS analysts said, but
the impact of potential sanctions over the Ukraine conflict is
likely to be minimal. Russia accounted for more than 40 percent
of supply last year. 
    Palladium prices were on track to rise over 2 percent this
week, despite a 5 percent weekly drop in the holdings in
palladium exchange-traded funds. 
    "Investors have stepped in on declines to bring prices right
back up so far this year, and there is also a geopolitical
element to the palladium market as well," said James Steel,
chief metals analyst at HSBC.
    Spot palladium was up 1 percent at $901.50 an ounce
by 1:54 p.m. EDT (1754 GMT), while the NYMEX palladium contract
for December delivery settled up $11.45 at $909.55 an
ounce.
    But big speculative long positions in U.S. palladium futures
and the sizable ETF outflow earlier this week suggested the
market could cut bullish bets, said Bart Melek, head of
commodity strategy at TD Securities.  
    Meanwhile, spot gold fell 0.3 percent to $1,286.26 an
ounce. U.S. COMEX gold futures for December delivery 
settled down $3 an ounce at $1,287.40.
    For the month, gold has posted a 0.3 percent gain on
lingering geopolitical tensions over Ukraine, Iraq and Gaza,
recovering after briefly falling to a two-month low at $1,273.06
last week.
    On Friday, the S&P 500 equities index edged up as the
latest in a string of positive economic reports pushed investors
to extend a rally that was briefly threatened by overseas
concerns. 
    The gold market largely ignored a note of caution introduced
by Britain, which raised its international terrorism threat
level to the second highest, in response to possible attacks
being planned in Syria and Iraq. 
    Among other precious metals, silver was down 0.8
percent at $19.39 an ounce, while spot platinum edged off
0.1 percent to $1,418.99 an ounce.
    
1:54 PM EDT     LAST/    NET   PCT      LOW    HIGH  CURRENT
               SETTLE   CHNG  CHNG                       VOL
US Gold DEC   1287.40  -3.00  -0.2  1284.10 1292.50   67,224
US Silver DEC  19.492 -0.117  -0.6   19.475  19.675   28,151
US Plat OCT   1424.70  -0.50   0.0  1422.10 1428.60    6,429
US Pall DEC    909.55  11.45   1.3   895.70  910.50    5,301

Gold          1286.26  -3.48  -0.3  1283.60 1291.30         
Silver         19.390 -0.160  -0.8   19.430  19.620
Platinum      1418.99  -1.01  -0.1  1423.50 1426.00
Palladium      901.50   8.50   1.0   896.00  907.00

TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
               CURRENT   30D AVG  250D AVG   CURRENT     CHG
US Gold         71,457   137,041   157,256     13.21    0.04
US Silver       32,814    57,523    53,029     16.74    0.36
US Platinum      7,425     8,919    11,736     12.83   -0.15
US Palladium     5,852     9,626     6,083     18.38    0.13

 (Additional reporting by Lewa Pardomuan in Singapore; Editing
by Keiron Henderson, David Goodman, Mark Potter and Jeffrey
Benkoe)

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