PRECIOUS-Palladium jumps to 2011 highs after early buying burst

Fri Apr 11, 2014 8:13pm GMT

* Global equities slip to two-week lows

* Dollar index steady, on course for weekly fall

* Chinese prices at discount of $1 per ounce; demand weak (Updates prices, adds comment)

By Josephine Mason and Clara Denina

NEW YORK/LONDON, April 11 (Reuters) - Palladium prices shot through $800 an ounce for the first time in almost three years on Friday after a burst of heavy early buying triggered light buy stops as investors bet on tightening supplies from top exporter Russia and strong automotive demand.

Gold held around 2-1/2-week highs on Friday, heading for its biggest weekly gain in a month on sagging risk appetite and increasing hopes the U.S. Federal Reserve will hold off on raising interest rates as soon as early next year.

Standing out in a broadly flat market, palladium, the smallest of the four precious metal contracts, took off midmorning after "light" buy stops were triggered after piercing $800 per ounce for the first time since June 2011, a broker said.

The move was not mirrored anywhere else in the precious complex or financial market and what kicked off the sudden flurry of buying was not immediately clear.

But it was conspicuous for its volume and size: Some almost 2,000 lots of futures changed hands in the 10 minutes before 10:00 a.m., a third of the average daily volume of the past few months, driving $15 gains, more than half the day's trading range.   Continued...

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