Dealers scramble for palladium as market looks to Tiger hedge fund

Hedge-fund activity dominated the precious metals market yesterday, sending dealers scrambling for increasingly short supplies of palladium and platinum.

At the London morning fix, palladium, which is used in vehicle catalytic converters and mobile telephones, had gained 13 per cent to US$235 an ounce, before settling in the afternoon at $210.

Platinum also approached a 20-month high reaching $442 in the afternoon fix.

Tiger Management, the aggressive $8 billion hedge fund run by Julian Robertson, was named as having taken a long position on palladium.

Analysts said Tiger's intentions had become the market's focus, as many players had been caught by the rally with significantly short positions, and had been forcing the price upwards as they continually rolled their own positions over.

'The hedge fund that controls a lot of metal is called Tiger . . . what it's doing nobody knows,' Ted Arnold, a precious metals analyst at Merrill Lynch, said.