Palladium, gold climb as West cranks up sanctions on Russia

Palladium jumped about 6 per cent on Monday as fresh Western sanctions on Russia raised supply concerns for the auto-catalyst, while gold rose over 1 per cent as safe-have demand was buoyed by President Vladimir Putin putting Russia's nuclear deterrent on high alert.

Palladium was up 5.1 per cent at $2,486.64, as of 0335 GMT, after scaling its highest since July 2021 at $2,711.18 last week, and set for a third consecutive monthly rise.

The United States and its allies on Saturday moved to block certain Russian banks' access to the SWIFT international payment system, which traders and analysts said could disrupt Russian exports of all commodities from oil and metals to grains.

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President Vladimir Putin put Russia's nuclear deterrent on high alert on Sunday, the fourth day of the biggest assault on a European state since World War Two.

"There's just real concern here that shipping channels are just going to get disrupted because of this Ukraine situation," said Stephen Innes, managing partner at SPI Asset Management. "It's not necessarily the short-run spike that really weighs negatively but more of the how long this is going to last."

Russia's Nornickel is the world's largest supplier of palladium, used by automakers for catalytic converters and to clean car exhaust fumes. Spot gold climbed 1 per cent to $1,906.11 per ounce, rising about 6 per cent so far this month in what would be its best monthly gain since May 2021.

US gold futures advanced 1.1 per cent to $1,909.00. Western sanctions on Russia were substantially enhanced over the weekend, leading to a risk-aversion sell-off in markets at the Asian open, and resulting in a spike for safe-haven demand for gold, Jeffrey Halley, a senior market analyst at OANDA, said in a note.

Gold is often used as a hedge against inflation and as a means of preserving wealth during times of financial and political uncertainty. Spot silver rose 0.3 per cent to $24.26 per ounce and platinum was up 0.2 per cent at $1,055.85, with both poised for monthly gains.

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