December 20, 2019 / 4:26 PM / a month ago

PRECIOUS-Palladium drops over 5% as investors lock in profits; gold subdued

 (Recasts, adds analyst comment, updates prices)
    * Wall Street soars to record highs
    * Palladium set for its worst day since Aug.
    * Silver extends gains into second week
    * GRAPHIC-2019 asset returns: tmsnrt.rs/2jvdmXl

    By Karthika Suresh Namboothiri
    Dec 20 (Reuters) - Palladium slumped more than 5% on Friday,
erasing more than $100 per ounce in the session, as investors
booked profits following a strong record run, while gold prices
were subdued as investors remained on the sidelines ahead of the
holiday season.
    Spot palladium        shed 5% to $1,839.47 an ounce as of
1:20 p.m. ET (1820 GMT), on track for its biggest percentage
fall since early August.
    "Palladium got so close to the $2,000 level and now the fact
that it's broken down two days in a row, the pull back here
shows that the technical in the market has taken over," said Bob
Haberkorn, senior market strategist at RJO Futures. "When the
markets are overextended, the corrections tend to become pretty
dramatic."
    The auto-catalyst metal hit by supply deficit scaled an
all-time peak of $1,998.43 an ounce earlier this week. Prices of
palladium has risen about 46% so far this year.
    Meanwhile, spot gold        was little changed at $1,477.40
an ounce, but was on track for a modest weekly rise. U.S. gold
futures         settled 0.2% lower at $1,480.90 an ounce.
    "There are concerns that the stocks are so hot right now.
And there are investors who are buying gold as a backstop if
that thing is to turn," Haberkorn added.
    World stock markets touched record highs, while the U.S.
dollar was set for its best week in six against a basket of
currencies       .            
    Gains in bullion were limited after data showed U.S.
economic growth edged up in the third quarter amid signs the
economy more or less maintained the moderate pace of expansion
as the year ended.             
 
    Recent positive economic data and optimism around the
U.S.-China trade war has fuelled expectations that the U.S.
Federal Reserve is unlikely to cut interest rates again in the
near future.
    U.S. Treasury Secretary Steven Mnuchin said the United
States and China would sign their so-called Phase 1 trade pact
in early January.             
    Safe-haven gold has so far gained more than 15% in the year
on global recessionary fears, owing to the 17-month trade war
between the two largest economies. The likelihood that
negotiations are proceeding smoothly has drawn some attention
away from gold.
    "Traders and investors are turning their attention to the
upcoming holidays, including squaring their books, so trading
interest and volumes are likely to wane the next couple weeks,"
Kitco Metals senior analyst Jim Wyckoff said in a note.
    Platinum        eased 2.2% to $913.64 per ouce, while silver
       rose 0.6% to $17.15 an ounce. Silver extended gains into
a second week, up 1.4%.

    
 (Reporting by Karthika Suresh Namboothiri in Bengaluru; Editing
by Dan Grebler and Will Dunham)
  
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