Palladium soared to a record just shy of the $1,900 mark on Monday, while gold edged higher as uncertainty over U.S.-China trade talks took center stage ahead of a Dec. 15 deadline for fresh U.S. tariffs.
Autocatalyst metal palladium climbed to an all-time high of $1,898.50 an ounce and was last up 0.19% at $1,881.43.
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"Palladium has a very strong fundamental backdrop with supply set to stay quite scarce and demand growth set to increase," said Daniel Ghali, commodity strategist at TD Securities.
Palladium has risen nearly 50% in 2019 on a sustained supply squeeze, and has constantly been breaking records, despite a weakening global auto sector. Increasingly stringent emissions regulations globally are raising the palladium in autocatalysts for gasoline-powered cars and 2020 could see the most number of regulations, Ghali added.
"There is a widespread expectation that (palladium) spot prices are headed towards $2,000 and the market does currently appear to be in a one-way street," INTL FCStone analyst Rhona O'Connell said in a note. "Even with the (auto) sector under pressure, palladium will be in deficit for the foreseeable future and the funds are chasing it higher."
"The tariff deadline of Dec. 15 is certainly top of everyone's mind ... The situation is still uncertain, helping gold stay firm," TD Securities' Ghali said. China said on Monday it hoped to make a trade deal with the United States as soon as possible, as Washington's next round of tariffs against Chinese goods is scheduled to take effect on Dec. 15. Also supporting bullion, equity markets were further pressured after China's exports shrank in November.
Markets now await the U.S. Federal Reserve's two-day meeting starting on Tuesday for cues on its monetary policy. The central bank is expected to highlight the economy's resilience and keep interest rates on hold in the range of 1.50% to 1.75%.
U.S. investment bank Goldman Sachs said investment demand for gold would be supported by recession fears and political uncertainty, forecasting prices at $1,600 an ounce over a three- and 12-month period.
Platinum and silver were up 0.2% at $897.36 and $16.60 an ounce, respectively.