Gold, palladium slip as equities gain after Biden's Russia sanctions
Feb 24 (Reuters) - Precious metals reversed course on Thursday with gold slipping below the key $1,900 per ounce level and palladium shedding more than 5% as equities rebounded after U.S. President Joe Biden unveiled harsh new sanctions against Russia.
Spot gold fell 0.6% to $1,895.76 per ounce at 3:56 p.m. ET (2056 GMT), having earlier touched its highest level since September 2020 at $1,973.96.
U.S. gold futures settled 0.8% higher at $1,926.30.
Biden hit Russia with a wave of sanctions on Thursday after Moscow invaded Ukraine, measures that impede Russia's ability to do business in major currencies along with sanctions against banks and state-owned enterprises. read more
"If current sanctions are the limit of the response, the economic impact is limited. So we are seeing short-covering in stocks," said Tai Wong, an independent metals trader in New York.
Wall Street advanced in volatile afternoon trading, with the Nasdaq up nearly 2% after Biden's comments on Russia.
"Gold's afternoon selloff accelerated after President Biden unveiled the next round of sanctions, which many thought were not hard-hitting enough," said Edward Moya, senior market analyst at Oanda.
"However, Russia's invasion of Ukraine is a gamechanger and demand for safe-havens will remain elevated and gold prices will likely see strong support over the short term."
Palladium fell 4.3% to $2,375.02, having earlier hit its highest level since July at $2,711.18.
"Potential disruptions could have a far more significant market impact on the platinum group metals, particularly given expectations that easing supply-chain challenges in H2, 2022 and a recovery in auto production will support increasing auto-catalyst demand," said Standard Chartered analyst Suki Cooper.
Russia's Nornickel (GMKN.MM) is the world's largest supplier of palladium and a major supplier of platinum. read more
Platinum dropped 3.4% to $1,054.80, after rallying to as high as $1,126.18. Silver fell 1.7% to $24.10.
Reporting by Swati Verma and Brijesh Patel in Bengaluru, additional reporting by Ashitha Shivaprasad; Editing by Amy Caren Daniel and Shinjini Ganguli
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