(Bloomberg) -- Palladium fell for a third day, heading for the biggest drop in almost nine years and fueling concern that the metal's multi-month rally has run out of steam.
The commodity used in pollution-reducing auto catalysts, which surged to a record last week on the outlook for tightening supplies, fell as signs of slowing economic growth sparked demand worries. The sell-off comes after hedge funds cut bullish bets and some analysts warned of a growing potential for a price correction. A strong dollar added to headwinds.
While it's difficult to speculate on what triggered the sharp drop, “I think that the bubble has burst,” said Georgette Boele, senior FX and precious metals analyst at ABN Amro Bank NV. “Palladium is finally feeling some gravity.”
To contact the reporters on this story: Caleb Mutua in New York at dmutua@bloomberg.net;Rupert Rowling in London at rrowling@bloomberg.net
To contact the editors responsible for this story: Luzi Ann Javier at ljavier@bloomberg.net, ;Joe Richter at jrichter1@bloomberg.net, Christine Buurma
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