The price of commodities, including gold, silver and palladium, fell yesterday, as a strengthening US dollar hit investor demand for the precious metals that had heightened on the escalation in the conflict between Russia and Ukraine.
As the dollar strengthened on better manufacturing data and the prospect of an end to stimulus, gold slipped to its lowest price in 10 weeks yesterday, with the price down to just below $1,265 (£767) an ounce at one point during trading.
Silver was also down below $19.20 an ounce yesterday, hitting its lowest level since mid June, while palladium fell back to $885 an ounce after having soared to impressive highs since the end of last week,
Palladium had hit its highest price in more than 13 years at the start of the week, rising well above $900 an ounce during trading on Monday, with hostilities in Ukraine and prospect of further sanctions against Russia helping to drive up the price.
Russia is responsible for around 40 per cent of world production of Palladium, with concerns of supply disruptions if the west chooses to punish Russian with more sanctions.
The price of palladium has risen by around a quarter in the year to date, with the impact of long-running strikes in the mining sector in South Africa, which is the second largest producer in the world, also affecting the price in the first half of the year before the industrial problems were resolved.
While palladium’s price slipped back yesterday, its value this year has also been boosted by increasing demand from the strong recovery in the car industry, with the commodity having a key industrial use in catalytic converters, used to clean car exhaust emissions.