Palladium Prices sink Lower Overnight

During trade on Monday into today, spot palladium prices sank five percent. The United States has hinted that it could ease sanctions against Russia’s Rusal. Also, gold hit a two week low. This morning, investors fled safe haven assets for the dollar. This came as U.S. Treasury yields are trading near three percent.

As of 2:30 PM EST, Monday, Spot palladium was down 4.43 percent. It was trading at $984.43 an ounce. This was near its session low of $978.22 an ounce.

Spot gold was also down. It fell 0.79 percent to $1,324.20 per ounce. This comes after trading near a two week low of $1,323.61. U.S. gold futures, for June delivery, were also down. They shed 0.92 percent to $1,326 per ounce.

Traders React to Comments from the U.S. on Russian Sanctions

In the headlines, the United States said it could ease back sanctions on Russian aluminum firm Rusal. This could happen if Oleg Deripaska give up control of the firm. This signaled that Washington might extend more sanctions to Russian palladium miner Nornickel.

Nornickel, the world’s largest palladium miner, is has known ties with both Rusian companies, Rusal and Deripaska. Fears of new U.S. sanctions had sent prices soaring. This has happened since April 6. That is when sanctions from the United States were first levied against Russia.

Also in the headlines, affecting global commodity prices, the U.S. dollar his at a seven-week high. The dollar is being supported by a spike in the yield for the benchmark 10 year Treasury note. It is now testing the key three percent level.

A firmer dollar makes dollar priced commodities more expensive to hold.  As a result, traders have shifted out of commodities and safe havens into the higher yielding U.S. dollar. Other safe haven currencies, like the Japanese yen, also lost ground this morning during Asian trade hours.