By Tatyana Shumsky
NEW YORK--Palladium prices closed higher, but pulled back from
13-year highs, as investors await the European Union's decision on
new economic sanctions against Russia, while gold prices were flat
as traders watched for new developments in Eastern Europe and the
Middle East.
Palladium for September delivery, the most active contract,
settled 95 cents, or 0.1%, higher at $880.75 a troy ounce on the
New York Mercantile Exchange. The contract reached an intraday high
of $899.90, the highest level since February 2001.
Investors have flocked to palladium this year amid worries about
supply from two of the world's largest producers. A mine-worker
strike in South Africa, which ran from January to June, had taken
roughly 30% of the world's palladium supply offline for five
months.
Meanwhile, tensions between Russia and the West over Moscow's
support for separatist fighters in Ukraine has led to several
rounds of economic sanctions. Some investors worry that access to
Russia's palladium output, which accounts for about 40% of global
supply, could be disrupted by further trading curbs.
"If you have any kind of threat to supply, there's a rush to
stockpile," said George Gero, a senior vice president with RBC
Capital Markets Global Futures.
On Monday, European Union officials began a two-day meeting in
Brussels to discuss economic sanctions that would restrict Russian
access to European capital markets and prohibit exports of
militarily sensitive goods, energy-sector technology and arms to
Russia. Germany, one of Russia's largest trading partners, has
expressed its willingness to back the targeted measures even if
they pressure some domestic companies.
The move comes after a Malaysian Airline passenger jet was shot
down at the Ukraine-Russia border earlier this month, killing
almost 300 people.
Some investors worry that Moscow could retaliate against the
West by halting its palladium exports. The precious metal is widely
used in car exhaust filters, where it helps to break down air
pollutants.
In other markets, gold prices settled unchanged at $1,303.30 a
troy ounce on the Comex division of the Nymex.
Write to Tatyana Shumsky at tatyana.shumsky@wsj.com