FINANCIAL MARKETS : Commodities : Fusion Tests Lift Palladium Prices to Highest Point Since ’83

Palladium futures prices surged to their highest level in nearly 5 1/2 years Wednesday on New York’s Mercantile Exchange amid optimism that recent nuclear fusion experiments could spur demand for the metal as an ingredient in the power plants of tomorrow.

Other precious metal futures prices also advanced.

On other markets, cocoa futures plunged, gasoline prices rose but other energy futures were mixed; grains and soybeans were mostly higher, and livestock and meat futures were mixed.

Palladium settled $4.40 to $5.15 higher, with the contract for delivery in June at $173.65 an ounce. The move marked palladium’s first foray above $170 since December, 1983, when the metal reached nearly $180 an ounce.

Palladium prices have risen in 10 of the 13 trading sessions since March 23, when two chemists announced that they had achieved nuclear fusion at room temperature using palladium as a catalyst in an experiment at the University of Utah.

Fusion is the joining together of hydrogen atoms to produce enormous amounts of energy. It is the process that powers the sun and stars, and scientists seeking a cheap energy source have long sought to harness it.

Last week, palladium for June delivery went as high as $169 an ounce only to collapse Friday amid skepticism about the Utah findings.

But Monday, researchers at Texas A&M; and Georgia Tech announced that they had replicated at least part of the University of Utah results, bringing new buyers into the usually quiet palladium market.

Some of the buying interest in palladium spilled over into the platinum market Wednesday.

Other Reasons Cited

“Palladium created a psychological environment which was conducive to rallies in the other precious metals,” said George Anagnos, an analyst with Thomson McKinnon Securities Inc. in New York.

But analysts said the moderate rise in gold and silver futures was more likely a response to inflation jitters and signs that the dollar’s recent strength has peaked.

Platinum settled $3.30 to $3.80 higher on the New York Merc, with May at $531.80 an ounce. On New York’s Commodity Exchange, gold settled $2.20 to $2.40 higher, with June at $392.10 an ounce, and silver was 3.2 cents to 4.2 cents higher, with May at $5.895 an ounce.

Cocoa futures plummeted on New York’s Coffee, Sugar & Cocoa Exchange on rumors that the Ivory Coast, the world’s largest cocoa producer, had sold an unknown quantity of cocoa through the Swiss trade house Intercafco, which denied any such deal.

Cocoa settled $30 to $56 lower, with May at $1,272 per metric ton.

Unleaded gasoline futures rose sharply for the fourth straight day on supply concerns. The crude and heating oil markets were quiet.

West Texas Intermediate crude oil settled unchanged to 6 cents higher, with May at $20.64 a barrel; heating oil was unchanged to 5 cents lower, with May at 53.20 cents a gallon, and unleaded gasoline was 0.20 cent lower to 1.11 cents higher, with May at 70.11 cents a gallon.

Most grain and soybean futures prices rose on the Chicago Board of Trade amid rumors of new Soviet buying interest in the wheat market.

But oat futures retreated, reflecting the abundance of foreign oats available on the U.S. market.

Wheat Futures Rise

Wheat settled 2 cents to 6 3/4 cents higher, with May at $4.03 a bushel; corn was 2 1/4 cents to 3 1/2 cents higher, with May at $2.67 3/4 a bushel; oats were 1 3/4 cents to 4 1/2 cents lower, with May at $1.79 a bushel, and soybeans were 2 cents to 7 cents higher, with May at $7.27 1/2 a bushel.

On the Chicago Mercantile Exchange, weak cash markets and profit taking weighed on the cattle futures while pork futures advanced on speculation that farmers soon will be busy with spring planting and will be marketing fewer hogs.

Live cattle settled 0.87 cent lower to 0.60 cent higher, with April at 76.45 cents a pound; feeder cattle were 0.12 cent to 0.93 cent lower, with April at 76.40 cents a pound; live hogs were 0.12 cent to 0.38 cent higher, with April at 39.95 cents a pound, and frozen pork bellies were 0.20 cent lower to 0.28 cent higher, with May at 33.30 cents a pound.

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