NEW YORK: Palladium prices fell nearly 13% on Monday as China’s COVID-led lockdowns soured the demand outlook for the autocatalyst, while looming US interest rate hikes took the shine off gold.

Spot palladium fell 9.6% to $2,146.20 per ounce by 1:52 p.m. ET (1752 GMT), after hitting its lowest since March 29 at $2,068.82.

Commodities across the board dipped as concerns grew over prolonged lockdowns in Shanghai and potential increases to US interest rates hurting global growth and demand, which also led to a sharp selloff in equities.

Palladium, used in vehicle exhausts to curb emissions, has retreated nearly 40% since hitting an all-time high in early March on concerns the war in Ukraine could cut supply from key producer Russia.

“Much of the angst in palladium is surrounding the potential problems with the Chinese economy,” said head of commodity strategies at TD Securities, Bart Melek.

“(With) an increasing amount of that country being shut, chances are auto demand and economic activity broadly aren’t going to be as strong as we thought, and this is offsetting a lot of the potential shortage concerns associated with the Russian sanctions,” Melek added.

Russia’s Nornickel said its first-quarter palladium output fell year-on-year.

Gold fell 1.7% to $1,897.01, while US gold futures settled nearly 2% lower at $1,896.

“Due to the broad-based rise in yields, gold is losing its attractiveness as a non-interest-bearing investment, as government debt securities are again yielding positive nominal returns,” Commerzbank wrote in a note.

Although bullion is considered a hedge against soaring inflation and uncertainties such as the Ukraine conflict, rising interest rates dampen its appeal by increasing the opportunity cost of holding the non-interest bearing asset.

The dollar index hit a two-year high, making gold costlier for overseas buyers.

Platinum fell 1.8% to $913.99 after touching a trough since December 2021, while silver fell 2.2% to $23.62 per ounce, after hitting an over two-month low.