March 24, 2020 / 3:38 PM / in 12 days

PRECIOUS-Palladium, platinum soar on S. Africa lockdown; gold rallies

 (Updates prices)
    * Gold supply fears propel spot prices 
    * Palladium eyes biggest daily gain since 2001
    * Platinum on track for best day since 2008
    * FACTBOX-Latest on spread of coronavirus globally
            

    By Sumita Layek
    March 24 (Reuters) - Palladium and platinum prices surged on
Tuesday, with palladium on track for its biggest daily gain
since 2001 as major producer South Africa was locked down due to
the coronavirus, while gold soared over 5% as fresh stimulus
stopped liquidation among investors.
    Palladium        jumped 10.9% to $1,906.46 per ounce by
14:26 p.m. EDT (1836 GMT) and platinum        gained 8.4% to
$696.57 per ounce.             
    "The market focus is starting to turn to some of these
supply disruptions that the virus brings. South Africa is
clearly the main one," said Saxo Bank analyst Ole Hansen.  
    "So, the focus has shifted somewhat from the risk to having
a major drop in demand to the equally challenging condition
where we've supplies struggling to find its way through to the
buyer of the metal."
    Platinum was set for its biggest daily gain since 2008,
while palladium jumped over 15% earlier in the session.
    South Africa "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,"
said Dmitry Glushakov, Head of Metals & Mining Research at VTB
Capital.
    The benchmark spot gold price soared but not as much as 
U.S. gold futures in a sign the market is worried air travel
restrictions and precious metal refinery closures will hamper
shipments of bullion to the United States to meet contractual
requirements.             
    Spot gold        climbed 5% to $1,629.85 per ounce, while
U.S. gold futures         settled up 5.95% at $1,660.80.
    "The massive Fed stimulus and QE program continues to
support gold as it erodes the currency (U.S. dollar). Hard
assets are going to be in vogue in that environment," said David
Meger, director of metals trading at High Ridge Futures.
    "The pressure is lifted, we're no longer seeing the
indiscriminate selling, to the contrary, we're seeing the cream
rise to the top."
    Wall Street rallied on signs that Washington was nearing a
deal on a $2 trillion economic rescue package.            
    The Fed announced unlimited quantitative easing and
programmes to support credit markets on Monday. The move
triggered a dip in the dollar.                    
    Also helping bullion, three of the world's largest gold
refineries said they had suspended production in Switzerland for
at least a week to curtail the spread of the
contagion.            
    Meanwhile, U.S. business activity contracted further in
March, hitting a record low as the coronavirus pandemic
depressed activity in both the manufacturing and services
sectors.             
    Silver        jumped 6.2% to $14.07.

 (Reporting by Sumita Layek in Bengaluru and Peter Hobson in
London; Editing by David Gregorio and Cynthia Osterman)
  
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