PRECIOUS-Palladium extends record run on supply shortfall

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* Graphic: 2021 asset performance http://tmsnrt.rs/2yaDPgn
* Gold retreats on stronger dollar

(Recasts, adds comments, updates prices)
By Sethuraman N R
May 4 (Reuters) - Palladium soared to an all-time high on
Tuesday, extending a record run driven by concerns of a shortage
of the metal used in emissions-controlling devices for
automobiles.
Palladium XPD= was up 1.2% to $3,007.66 per ounce at 1136
GMT, after jumping to a record of $3,017.18.
Prices of the autocatalyst have jumped about 21% since
mid-March when top producer Nornickel GMKN.MM announced
disruptions at two mines, exacerbating market concerns about a
shortage.
"Palladium lives in its own world with low liquidity and
strong momentum potentially taking it higher still," said Ole
Hansen, head of commodity strategy at Saxo Bank, adding however,
the metal may be at risk of a price correction, "especially if
it fails to hold onto the $3,000 mark."
Chronic undersupply shot prices from around $500 an ounce in
2016 up to $2,875.50 just before the coronavirus outbreak began.
A shift to electric vehicles may eventually erode demand,
but tightening environmental rules have forced carmakers to use
more and more palladium in gasoline engines.
Gold, meanwhile, retreated on a stronger dollar.
Spot gold XAU= was down 0.6% to $1,782.45 per ounce, after
hitting its highest since Feb. 25 at $1,797.75 on Monday.
Carlo Alberto De Casa, chief analyst at ActivTrades, said
technical factors were pressuring gold, while "the U.S. dollar's
recovery is making it more complicated".
"We have two important support levels at $1,765 and $1,750,
while a clear surpass of $1,800 would open up space for
bullion."
The dollar index .DXY rose 0.4% as investors weighed
chances that U.S. interest rates will be forced higher by a
roaring U.S. economic recovery, reducing bullion's allure for
other currency holders. USD/
Higher interest rates increase the opportunity cost of
holding non-yielding bullion.
Investors await U.S. services data on Wednesday and April
payrolls on Friday. Silver XAG= was down 0.2% at $26.83, after hitting its
highest since March 1 on Monday, while platinum XPT= rose 1%
at $1,241.95.

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