* Palladium hits 2-yr high; market balance seen tightening
* US platinum group ETF holdings soars, boosting prices
* Gold Investment outpaces jewelry 1st time in 30 years
(Recasts, adds comments, closing prices, changes byline,
dateline, previously LONDON)
By Frank Tang
NEW YORK, April 14 (Reuters) - Palladium hit a two-year
high on Wednesday, rising 4 percent on growing demand by
exchange traded funds and a possible supply shortfall.
Other platinum group metals also rose sharply in thin trade
as economic optimism boosted autocatalyst demand, while gold
and silver also climbed on dollar weakness.
"Palladium and platinum are driven higher by the ETFs
taking physical metals off the market. We continue to see
investment flows coming into the market," said Miguel
Perez-Santalla, vice president of sales at Heraeus Precious
Metals Management in New York.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
For a graphic of the price of gold against jewelry and
investment demand, click http://link.reuters.com/kec77j
For a Reuters Insider interview with GFMS Chairman Philip
Klapwijk, click http://link.reuters.com/hac67j
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
Holdings in ETF Securities Ltd's U.S. platinum and
palladium funds have risen to almost 1 million ounces in the
combined metals since their inception earlier this year.
Perez-Santalla also cited a possible shortfall in palladium
output related to South Africa's power problems and uncertain
supply from top producer Russia.
Palladium hit a high of $548.50, its highest price since
March 2008.
It <XPD=> was at $547 an ounce at 3:01 p.m. EDT (1901 GMT)
against $526 late in New York on Tuesday, while platinum <XPT=>
was at $1,727.50 an ounce against $1,714.
Other PGMs also took the lead from pallaidum, with rhodium
hitting its highest since October 2008 at $2,875 an ounce,
ruthenium its highest since December 2008 at $190 an ounce, and
iridium <IRID-LON> a 12-year high at $520 an ounce.
Perez-Santalla, however, said palladium prices could tumble
when investment demand eventually weakens. "We do feel that at
this moment the market is very 'toppish', and it's going to
struggle to go any higher," he added.
GFMS REPORT, JEWELRY IN FOCUS
Gold rose on Wednesday as the dollar fell against the euro
on disappointment Federal Reserve Chair Ben Bernanke gave no
new guidance on U.S. interest rates. []
The euro was also buoyed after Singapore effectively
revalued its currency, and as upbeat U.S. corporate earnings
boosted appetite for currencies seen as higher risks.
The Singapore move was viewed as a mark of confidence in
the economic recovery.
Meanwhile, a closely watched industry report said investors
looking to preserve wealth from a global economic crisis last
year bought more gold than did jewelry consumers for the first
time since gold was rallying back in 1980.
Record investment demand could drive gold prices to
all-time highs in 2010, even though the metal is near the final
stage of its 10-year bull market, metals consultancy GFMS Ltd
said in its Gold Survey 2010. []
Spot gold <XAU=> was at $1,157.15 an ounce against
$1,150.15 late in New York on Tuesday. U.S. gold futures for
June delivery <GCM0> settled up $6.20 at $1,159.60 an ounce on
the COMEX division of the NYMEX.
The dollar's fall boosted interest in gold as an
alternative asset and made it cheaper for other currency
holders.
Gold was also supported by better risk appetite on the back
of positive U.S. corporate earnings, including those of
JPMorgan Chase <JPM.N>, which increased investor appetite for
riskier assets.
Government data showing tame consumer inflation in March
failed to drive prices up further. []
Silver <XAG=> was last at $18.39 an ounce against $18.18.
Close Change Pct 2009 YTD
Chg Close % Chg
US gold <GCM0> 1159.60 6.2 0.5 1096.20 5.8
US silver <SIK0> 18.415 0.166 0.9 16.845 9.3
US platinum <PLN0> 1734.20 16.90 1.0 1471.00 17.9
US palladium <PAM0> 548.00 26.20 5.0 408.85 34.0
Prices at 2:58 p.m. EDT (1858 GMT)
Gold <XAU=> 1156.30 6.15 0.5 1096.35 5.5
Silver <XAG=> 18.39 0.21 1.2 16.84 9.2
Platinum <XPT=> 1726.50 12.50 0.7 1465.50 17.8
Palladium <XPD=> 545.50 19.500 3.7 405.50 34.5
Gold Fix <XAUFIX=> 1153.75 -5.25 -0.5 1104 4.5
Silver Fix <XAGFIX=> 18.39 23.00 1.3 16.99 8.2
Platinum Fix <XPTFIX=> 1728.00 2.00 0.1 1466 17.9
Palladium Fix<XPDFIX=> 545.00 0.00 0.0 402 35.6
(Additional reporting by Jan Harvey in London; editing by Jim
Marshall)
