Palladium tumbled to a one-month low on Friday, extending its biggest drop in nearly a year in the previous session, as investors awaited confirmation that South Africa's longest mining strike would end soon.
Gold prices edged up after Thursday's 1 percent gain. The safe-haven metal, however, failed to rally further on market expectations that security conditions in Iraq will improve soon, traders said.
The leader of South Africa's striking AMCU union said on Friday he hoped to meet the three major platinum firms over the weekend to give them formal feedback from workers about a wage offer that could mean the end of a five-month strike.
On Wednesday, palladium had rallied to a 13-year high on speculation of a deadlock in wage talks.
Palladium, however, tumbled as much as 5 percent on Thursday on news that platinum group metal (PGM) producers and the AMCU agreed in principle on a wage deal, taking a step closer to resuming operations after the longest strike in the 130-year history of South Africa's mines.
Analysts said PGMs still have some upside as the miners start the long and slow process of getting operations back up.
"South African supply issues do not end with a resolution of the 21-week old strike," said UBS metals strategist Edel Tully. "A correction in PGMs would present an attractive entry point."
Palladium was down 1.2 percent to $812 an ounce by 3:11 p.m. EDT (1911 GMT), having touched its lowest since May 16 earlier. The metal lost about 3.5 percent for the week, its biggest decline since January.
Platinum fell 0.4 percent to $1,428.50 an ounce. It had lost almost 3 percent on Thursday in its biggest daily drop since June 2013.
South Africa's crippling five-month strike in the platinum belt has lifted palladium prices by more than 15 percent this year, outpacing gains in platinum which is up just six percent.
NO GOLD RALLY DESPITE IRAQ
_0">Spot gold was up 0.2 percent at $1,275.39 an ounce. U.S. COMEX gold futures for August delivery settled up 10 cents at $1,274.10 an ounce.
The metal, however, has not risen further following Thursday's 1-percent gain.
On Friday, Iraq's most senior Shi'ite Muslim cleric urged followers to take up arms against a full-blown Sunni militant insurgency to topple Shi'ite Prime Minister Nuri al-Maliki, escalating a conflict that threatens civil war and a possible break-up of the country.
"The general thought out there is that what's going on in Iraq will be contained and should not create a significant impact globally by affecting oil production," said Mike Meyer, assistant vice president at EverBank World markets in St. Louis.
_5">Silver rose 0.7 percent to $19.63 an ounce. 3:11 PM EDT LAST/ NET PCT LOW HIGH CURRENT
_6">SETTLE CHNG CHNG VOL US Gold AUG 1274.10 0.10 0.0 1270.90 1277.60 77,626 US Silver SEP 19.699 0.126 0.6 19.525 19.760 12,566 US Plat JUL 1435.00 -6.30 -0.4 1433.20 1457.30 11,925 US Pall SEP 812.60 -6.80 -0.8 806.35 831.25 8,547 Gold 1275.39 2.53 0.2 1271.00 1276.80 Silver 19.630 0.140 0.7 19.510 19.700 Platinum 1428.50 -6.00 -0.4 1433.00 1453.50 Palladium 812.00 -10.00 -1.2 808.50 829.60 TOTAL MARKET VOLUME 30-D ATM VOLATILITY
_7">CURRENT 30D AVG 250D AVG CURRENT CHG US Gold 80,224 157,616 165,263 12.81 -0.63 US Silver 64,905 44,418 55,217 16.72 -0.25 US Platinum 12,823 13,635 12,325 18.4 -0.42 US Palladium 8,672 8,952 5,834 23.01 3.60 (Additional reporting by Lewa Pardomuan in Singapore; Editing by Susan Fenton, David Evans, Meredith Mazzilli and Nick Zieminski)
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