WSJ: PRECIOUS METALS: NY Gold Rises Slightly, Palladium Rallies
NEW YORK (Dow Jones)--Gold futures are higher Wednesday on inflation-hedge buying as positive economic data stokes market optimism, while palladium prices are rallying sharply on expectations of a protracted market deficit.
In recent activity, most-actively traded June gold was up $3.40, or 0.3%, at $1,156.80 an ounce on the Comex division of the New York Mercantile Exchange. Thinly traded nearby April gold was up $5.30, or 0.5%, at $1,158.10.
U.S. retail sales leaped by 1.6% last month, the Commerce Department said Wednesday, compared with economists' expectations of a 1.3% increase, and "that little inflationary whiff" is helping gold, says George Gero, vice president with RBC Capital Markets Global Futures. Gold is often bought as a hedge against rising prices.
Separately, the Labor Department said U.S. consumer prices edged higher in March, with the seasonally-adjusted consumer price index up 0.1% on a monthly basis, in line with expectations.
The retail sales data are also boosting market appetite for perceived riskier assets like metals and pressuring the dollar, which is often viewed as a safe haven. Further, a weaker greenback tends to support gold by making the dollar-denominated metal less expensive for buyers using other currencies, helping demand.
Meanwhile, palladium is by far the biggest gainer among the New York-traded precious metals Wednesday morning after comments from a leading producer about expectations for a long-term deficit in the market.
Most-active Nymex June palladium is up $22.45, or 4.3%, at $544.25 an ounce. The nearby April contract has not yet traded Wednesday.
"The trigger for the rally was due to comments from Anglo Platinum Ltd. that the global market for the metal may be in deficit for much of the next decade due to the combination of increased industrial demand and the depletion of Russian stockpiles," said Leon Westgate, a base-metals analyst at Standard Bank in London.
Since there is much less trading volume in palladium than in, say, gold, the metal is often more volatile than other commodities.
