Platinum plunged more than 5.0 per cent and gold shed 2.0 per cent overnight, leading a sharp decline across precious metals driven by a soaring US dollar, with deficit-hit palladium too giving up some gains from a record rally in which it breached $US1,700 per ounce.
Silver slid more than 3.0 per cent to its lowest in more than a month.
Spot palladium eased 0.6 per cent to $US1,670.45 an ounce, having earlier touched a record high of $US1,700.71.
The metal has risen about 9.0 per cent this month.
“There is strong fabrication demand but a good part of this is speculative demand from investors who expect prices to rise and also people who are getting out of gold, silver and platinum because those prices are falling, some of them are shifting into palladium,” said Jeffrey Christian, managing partner of CPM Group.
“There’s a lot of concern that there isn’t a lot of palladium around; a big part of that is people who own the metal don’t want to sell at current prices. They want to see how high the price goes before they keep their profits.”
The price of palladium, used mainly in emissions-reducing catalysts for vehicles, has risen about 33 per cent this year and nearly 9.0 per cent this quarter, despite a weakening car sector, due to tight supply.
Meanwhile, gold shed 1.7 per cent to $US1,471.09 after the US dollar hit multi-year highs, making the US-dollar-denominated metal more expensive for holders of other currencies.
Earlier, prices fell about 2.0 per cent to their lowest since August 6 at $US1,463.99, with bullion also marking its first monthly decline in five.
For the quarter, however, bullion has risen more than 4.0 per cent so far.
US gold futures for December settled down 2.2 per cnet, at $US1,472.90.
“Gold and silver … continue to decline on a slightly firmer (US) dollar and a relatively uneventful geopolitical landscape,” INTL FCStone analyst Edward Meir said in a note.
Also weighing on gold, stocks firmed after the US government’s dismissal of a report from Friday which had said the US administration was considering delisting Chinese companies from US stock exchanges.
Investors also kept a close eye on the US Federal Reserve’s monetary policy.
The central bank cut interest rates earlier in September for the second time this year.
“The Fed said they’re going to be very cautious about lowering rates since it’s not clear that we really need to, which was taken as a confirmation that there’s a fair bit of potential growth before getting concerned about recession. So people backed away from some of the fears that drove them into gold on a short-term basis,” CPM Group’s Christian said.
Elsewhere, platinum dropped 5.6 per cent at $US878.86, having slumping to its lowest since August 28 at $US870.5 earlier.
Silver shed about 2.9 per cent to $US17.04 after touching a more than one-month low of $US16.89.
However, both metals are up about 5.4 per cent and 11.4 per cent for the quarter respectively.