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Palladium strong, gold lower

LONDON: Palladium continued strong on good industrial demand in Europe on Monday afternoon, dealers and analysts said.

The London afternoon fix reached a new all-time high of $465 a troy ounce, up from $460 at the morning fix and spot was last indicated at $463.50/$468.50.

"A pattern is being established where we get new highs, a small supply of Russian metal to push the price down again, then further highs as it's snapped up," said Ross Norman of Precious Metals Research.

"That goes to show how strong industrial demand is," he added.

Russia produces around two-thirds of the world's supply of palladium, used in the production of autocatalysts to clean car exhaust fumes.

"There are some stocks of Russian palladium in Europe left over from last year, but we haven't seen any fresh supplies this year," a dealer in Switzerland said.

Some Japanese importers said earlier this month that they had struck long-term deals with Russia's sole palladium exporter, Almazjuvelirexport.

Gold drifted lower ahead of Tuesday's fourth Bank of England gold auction, and was last quoted at $286.60/$287.10 compared with Friday's close at $288.80/$289.40.

"The auction isn't expected to cause much excitement this time around and any burst of short covering would likely be capped at $290," a dealer in London said.

Silver was quiet all day and last indicated one cent higher at $5.21/$5.24.

Platinum drew strength from palladium and was last indicated at $455.00/$459.00, up from Friday's New York close at $445.00/$450.00.-Reuters