Make Kitco Your Homepage

Palladium soars, eyes best day in two decades on S. Africa lockdown

Kitco News

(New throughout, adds comments, updates prices)

* Physical gold supply hit by Swiss refinery closures - analyst

* FACTBOX-Latest on spread of coronavirus globally

* Silver jumps to one-week high

By Brijesh Patel

March 24 (Reuters) - Palladium surged 12% on Tuesday, on track for its biggest daily rise since 2000 as major producer South Africa locked down due to the coronavirus, while gold soared over 3% as a fresh round of stimulus measures paused a run for cash amongst investors.

Autocatalyst metal palladium rose to $1,927.23 per ounce, while platinum rose 6.8% to $686.39, also helped by the 21-day shutdown.

"We believe this might provide significant support to Platinum Group Metals prices in the short term," said Dmitry Glushakov, Head of Metals & Mining Research at VTB Capital.

"The country accounts for some 70% of global platinum mined supply and 35% of palladium, with a 21-day lockdown possibly resulting in a 4% and 2% of 2020 supply reduction respectively."

Spot gold was up 3.2% at $1,603.01 per ounce by 1050 GMT and at its highest since March 13, having posted its best day since June 2016 on Monday with a 3.7% rise. U.S. gold futures climbed 6.1% to $1,662.70, and silver was up 6.4% to a one-week high of $14.10.

"There's no longer pressure to sell gold to cover margin calls and also, the U.S. dollar is a bit weaker," said Quantitative Commodity Research analyst Peter Fertig.

"If measures to tackle the impact of the virus show an impact and the numbers of new cases decline, gold might rise as some longer-term oriented investors buy it as an inflation hedge."

European shares attempted another rebound as the fresh wave of monetary and fiscal stimulus halted a global selloff in equity markets.

The Fed announced unlimited quantitative easing and programmes to support credit markets on Monday in a drastic bid to backstop an economy reeling from emergency restrictions on commerce to fight the coronavirus, triggering a dip in the dollar. ] Goldman Sachs said in?ationary concerns resulting from the central bank policy response to the outbreak should underpin gold this year as the "currency of last resort."

Global central banks have taken a range of measures to mitigate the damage of the outbreak, which has infected more than 377,300 and killed more than 16,500 people globally.

Also propping up bullion markets, was the closure of three of the world's largest gold refineries in Switzerland due to the outbreak that has squeezed supply of the physical metal, Stephen Innes, chief market strategist at financial services firm AxiCorp, said in a note.

(Reporting by Brijesh Patel in Bengaluru and Peter Hobson in London; Editing by Kirsten Donovan)

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.