Palladium prices neared a 13 year high after a setback in talks to end a mining strike in South Africa raised concerns about future supplies of the precious metal.
Miners in South Africa have been on strike for nearly five months, bringing exports to a standstill.
On Monday, the latest round of talks between miners and mining companies ended without a resolution.
Investors and traders say global supplies of palladium are starting to run low, meaning there could be a shortage if miners don't go back to work soon.
Prices have risen 14 per cent since the strike began in January.
The lower supplies go, the higher prices will rise, traders say.
On Tuesday, palladium for September delivery, the most actively traded contract, closed at $US854.55 a troy ounce on the Comex division of the New York Mercantile Exchange, the highest since February 2011.
South Africa produces about 40 per cent of the world's palladium, which is mainly used in automobile exhaust filters.
Global palladium inventories may be sufficient to meet up to 14 weeks of demand, down from 37 weeks at the start of the year, according to Citigroup estimates.
Gold for August delivery closed at up $6.20, or 0.5%, at $1,260.10 a troy ounce.
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