September 1, 2014 / 4:01 AM / 3 years ago

PRECIOUS-Palladium extends winning streak to 4th session on supply fears

* Palladium prices near 13-1/2-year high
    * Markets watch for any further Western sanctions on Russia
    * Gold steady as dollar, shares inch higher

 (Updates prices)
    By A. Ananthalakshmi
    SINGAPORE, Sept 1 (Reuters) - Palladium rose for a fourth
straight session on Monday to a 13-1/2-year high on fears that
supply from top producer Russia could be hit due to the Ukraine
crisis, while gold was little changed as the dollar nudged
higher. 
    Spot palladium had climbed 0.8 percent to $906.50 an
ounce by 0623 GMT, after earlier hitting a fresh 13-1/2-year
high of $907.50.
    Investors fear that an escalation of tensions over Ukraine
could result in an extension of sanctions against Russia to
include palladium producers. Russia accounted for more than 40
percent of global palladium supply last year.
    Palladium has gained nearly 27 percent this year, also
boosted by strong auto sales and mine strikes in No. 2 producer
South Africa that curbed supplies.
    "Prices hit their highest since 2001 as supply concerns
mounted amid the prospect for further sanctions against Russia,"
ANZ analyst Victor Thianpiriya said in a note. "(Palladium) is
well positioned for further gains."
    Russian President Vladimir Putin called on Sunday for
immediate talks on the "statehood" of southern and eastern
Ukraine, although his spokesman said this did not mean Moscow
now endorsed rebel calls for independence for territory they
have seized. 
    The Kremlin leader's remarks came as Europe and the United
States prepared possible further sanctions to halt what they say
is direct Russian military involvement in the war in Ukraine.
    Gold failed to find support from the escalating geopolitical
tensions in Ukraine as a stronger dollar offset the metal's
safe-haven appeal.
    Spot gold was steady at $1,287.70 an ounce, after
posting a small gain last week. The dollar index was trading
near a 13-month high, hurting bullion. 
    Higher equities have also diminished the appetite for gold.
SPDR Gold Trust, the world's largest gold-backed
exchange-traded fund and a gauge of investor demand, said its
holdings fell 0.08 percent to 795 tonnes on Friday. 
    Hedge funds and money managers decreased their bullish
futures and option bets in gold for a second consecutive week as
a record rally in U.S. equities sapped demand for the safe-haven
metal, data from the Commodity Futures Trading Commission showed
on Friday.    
    Physical demand for bullion remained subdued, with the U.S.
Mint seeing a 17 percent month-on-month drop in sales of
American Eagle gold coins in August. 
    
    PRICES AT 0623 GMT   
 Metal            Last     Change   Pct chg
                                    
 Spot gold         1287.7     0.63     0.05
 Spot silver        19.45     0.02      0.1
 Spot platinum     1416.4     -3.1    -0.22
 Spot palladium     906.5      7.3     0.81
 Comex gold        1288.7      1.3      0.1
 Comex silver        19.5    0.008     0.04
 Euro              1.3125                  
 DXY               82.758                  
                                    
 COMEX gold and silver contracts show the
 most active months
 
 (Editing by Joseph Radford, Muralikumar Anantharaman and Biju
Dwarakanath)

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