February 26, 2019 / 11:36 AM / 6 months ago

CORRECTED-PRECIOUS-Palladium retraces after breaching $1,550; gold awaits Fed (Corrects Feb. 26 story)

(Corrects attribution for comment in 10th paragraph in Feb. 26 story to INTL FCStone analyst Edward Meir, and not ANZ analyst Daniel Hynes)

* Market focus on Fed Chair Powell testimony

* Palladium up more than 21 pct so far in 2019

* Platinum hit 3-month-plus high earlier in the day

* GRAPHIC-2019 asset returns: tmsnrt.rs/2jvdmXl

By Arijit Bose

Feb 26 (Reuters) - Palladium retreated on Tuesday as investors took profits after the autocatalyst metal breached $1,550 for the first time due to a worsening supply scenario, while gold held a tight range ahead of U.S. Federal Reserve chairman Jerome Powell’s testimony.

Spot palladium, which traded as high as $1,554.50 per ounce earlier in the day, was down 0.5 percent at $1,534 as of 1116 GMT.

At least 15 mining firms in South Africa, a major producer of the metal, have received notices of strikes to be held later this week, providing further impetus to its gains.

The metal has risen more than 21 percent so far this year on a sustained supply deficit.

“There are increased talks that palladium is entering into the bubble territory because of the relentless rally that we have seen. Those who are long are tempted to take profits while we potentially may see a few attempts to sell some shorts in the market,” Saxo Bank analyst Ole Hansen said.

Elsewhere, spot gold was barely changed at $1,326 per ounce and U.S. gold futures were steady at $1,328.10 as the dollar remained subdued.

“The market is increasingly getting fed up, listening to the trade developments,” Hansen said, adding that bullion was now looking for further direction from the stock markets and concrete developments in U.S.-China trade relations.

On Sunday, U.S. President Donald Trump decided to delay a steep tariff hike on Chinese goods, touting progress in weekend trade talks.

Impetus can now be expected from Fed chairman Jerome Powell’s testimony on U.S. monetary policy and the economy before the Senate Banking Committee, due later in the day.

“Powell could use the opportunity to move perceptions a little bit more towards the hawkish side. In such a case, we could see modest dollar strengthening set in over the course of his remarks, likely exerting more downward pressure on gold,” INTL FCStone analyst Edward Meir said in a note.

Investors were also keeping a close eye on developments around Britain’s exit from the European Union after reports that UK Prime Minister Theresa May was considering delaying the March 29 departure date.

“As long as geopolitical risks, concerns over plateauing global growth and speculation over the Fed taking a pause on rate hikes remain key themes, gold is insulated from extreme downside shocks,” Lukman Otunuga, research analyst at FXTM, said in a note.

Elsewhere, silver fell 0.2 percent to $15.86 per ounce, while platinum was down 0.4 percent at $845.50, retracing from $857.50, its highest since early November. (Reporting by Arijit Bose and K. Sathya Narayanan in Bengaluru; Editing by Mark Potter)

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