Palladium fell about 7% on Monday, the biggest one-day percentage drop in more than two years, and gold prices also fell as strong US economic data boosted investors' risk appetite before the US Federal Reserve's (Fed/Fed) policy meeting .
At 1757 GMT, spot palladium fell 6.7% to $1,366.01 per ounce.
Palladium fell 7% to a low of $1,361.5, the biggest one-day drop since January 2017.
"This kind of sharp sell-off is inherently technical, as we begin to fall below some key support levels, allowing the decline to continue and the longs clearing the position," said David Meger, head of metals trading at High Ridge Futures.
Palladium fell about 16% from the record high of $1,620.52 hit last month.
Spot gold fell 0.5% to $1,279.32 an ounce, while US gold futures closed down about 0.6% at $1,281.50 an ounce.
“The stock market, at least in the US, is at a new high recently, and we are seeing a reduction in demand for safe-haven gold,” Meger said.
Global stock markets edged higher, and the S&P 500 hit a record high after the data showed that consumer spending in the US last month was the biggest increase in more than nine and a half years.
The recent stock market rally has led investors to reduce their holdings of gold. The world's largest gold-backed exchange-traded fund SPDR gold Trust's holdings fell to 746.69 tons last Friday, the lowest level since October 19.
Since the beginning of this month, the SPDR gold Trust's holdings have fallen by more than 3%.
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