Palladium fell on Friday as investors took some profits after hitting 2-1/2-year highs a day earlier and the dollar firmed, even as concerns remained about supplies as strikes in major producer South Africa drag on. Platinum and palladium were on track for a second straight weekly gain, with gold headed for a flat week.
Palladium shed 0.73 percent to $833.30 an ounce at 4:01 pm EDT (2000 GMT) as the dollar gained against the euro, making dollar-priced commodities more expensive for Europeans. The dollar hit a six-week high against a basket of currencies and US equities rose after better-than-expected data, while yields on Treasuries fell over uncertainty about elections in Ukraine over the weekend.
Palladium's weakness, however, was seen as only a pause in a rally that has pushed it up 16 percent this year on worries about the impact of the miners' strike in South Africa. It touched $837.40 an ounce in the previous session - its highest since August 2011. Traders attributed some of the decline to investors taking profits and squaring positions before the Memorial Day long weekend in the United States and Britain's spring bank holiday on Monday.
Technically the metal, mainly used in autocatalysts, was still on a strong footing. With prices still above the 200-day moving average, the next August 2011 high of $849 could be targeted in the coming days, traders said. "The longer the strike goes on, we are now at the point where people are asking the question about when dwindling stocks will start to have an effect," said Ole Hansen, head of commodities research at Saxo Bank.
Palladium was set to notch up its best weekly performance since early April with a 1.9-percent gain this week, and platinum was up 0.7 percent, the second straight weekly rise. The four-month miners' strike in South Africa could last much longer, the chief executive of Impala Platinum told Reuters on Thursday, adding that feedback from initial court-mediated talks with the world's biggest producers and main mining union was lukewarm.
The action is the longest and costliest in the mining history of South Africa, the biggest producer of platinum and the second-biggest producer of palladium. Spot gold dipped 0.09 percent to $1,293.16 an ounce and was headed for a largely flat week. The most-active June gold futures settled down $3.3, or 0.3 percent, at $1,291.7 an ounce. Traders were bracing for options expiry next week. Lessening tensions in Ukraine weighed on gold, seen as a safe-haven asset. The metal has been buoyed by the crisis between the West and Russia, gaining about 7 percent this year. Spot silver slipped 0.21 percent to $19.46 an ounce.
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