Palladium Tumbles Into Bear Market With Precious Metals Crushed
Palladium Nears Bear Market With Precious Metals Caught in Rout
(Bloomberg) -- Palladium, one of last year’s best-performing commodities, tumbled into a bear market as a strengthening dollar and coronavirus fears hammered precious metals and other raw materials.
Prices have fallen more than 20% on the New York Mercantile Exchange since a peak in late February, meeting the common definition of a bear market. Palladium dropped as much as 30% Thursday, the biggest-ever intraday loss in records back to 1986. The abrupt turn comes after shortages of the metal used in pollution-control devices pushed prices up by more than half last year.
Fears of economic fallout from the virus, along with slowing Chinese car sales, are now battering the commodity. Investors are rushing to the dollar amid the massive sell-off in U.S. equities, with an index of the greenback rising the most since 2016.
“Physical markets are yet to feel the full impact of the hit to end-use demand,” Citigroup Inc. analysts led by Ed Morse said in a note. The bank lowered its price forecast on the metal for 2020, partly because of “extreme weakness in end-use consumption globally in the near to term.”
Palladium futures for June delivery fell 14% to settle at $1,914.90 an ounce at 1 p.m. in New York. Prices are down 29% from a closing peak in February.
Platinum futures for April delivery slumped 10% to $781.80 an ounce. The metal has slumped about 24% from a peak in January, putting it well below the level that marks a bear market.
On the Comex in New York, gold slumped 3.2% and silver fell 4.6%.
To contact the reporter on this story: Justina Vasquez in New York at jvasquez57@bloomberg.net
To contact the editors responsible for this story: Luzi Ann Javier at ljavier@bloomberg.net, Joe Richter, Steven Frank
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