PRECIOUS-Platinum at 10-month high on supply worries; gold eases

Tue Jul 1, 2014 3:20pm EDT

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 (Adds comment, updates market activities)
    By Frank Tang and Jan Harvey
    NEW YORK/LONDON, July 1 (Reuters) - Platinum rose to a
10-month high above $1,500 an ounce on Tuesday, boosted by new
positioning by funds at the start of the quarter and long-term
supply worries despite the end of South Africa's mining strike.
    Gold reversed gains as investors took profits after strong
exchange-traded fund buying sent prices to a near two-month peak
earlier, a day after data showed U.S. gold coin sales rose to a
five-month high in June on heightened geopolitical tensions.
 
    On Tuesday, members of South Africa's largest union NUMSA
said members could down tools in a wildcat strike at state-power
utility Eskom, while more than 220,000 South African
engineering and metal workers launched a strike. 
 
    "It is the uncertainty over possible restructuring, combined
with how quickly the industry can gear up production that will
influence prices over the summer," said James Steel, HSBC's
chief precious metals analyst.
    Spot platinum hit its highest since September at
$1,511 an ounce and was up 1.5 percent at $1,503.50 an ounce by
2:54 p.m. EDT (1854 GMT).
    The NYMEX platinum contract for October delivery 
settled up $32.10 at $1,515 an ounce.
    Spot palladium was up 1.2 percent at $850.33 an
ounce.    
    Fears of further labor unrest continued to support platinum
group metal (PGM) prices. Last week, the world's biggest
platinum producers said they must restructure operations after
reaching a wage settlement with miners.
    Also underpinning PGM prices are demand hopes after major
automakers reported better-than-expected U.S. sales in June.
ID:nL2N0PC0K5]
    Bill O'Neill, partner of commodities investment firm LOGIC
Advisors, said new money flows on the first day of the third
quarter helped PGM prices.
    Among other precious metals, spot gold inched up 51
cents to $1,327.70, having earlier hit a three-month high at
$1,332.10 an ounce. 
    U.S. COMEX gold futures for August delivery settled
up $4.60 an ounce at $1,326.60.
    The world's largest gold exchange-traded fund SPDR Gold
Shares reported a 5.7 tonne inflow on Monday, the biggest
one-day change it has reported in its holdings since March 10.
 
    In the retail gold market, private-investor sentiment
towards the metal in June fell to its lowest level since
February 2010 following a sharp rally in gold prices earlier in
the month, said a survey by online precious metals market
BullionVault.
    The Gold Investor Index, which measures the balance of
customers adding to gold holdings over those reducing them,
dropped to 51.2 in June from 52.4 in May. A reading of 50
signals an equal number of net gold buyers and sellers.
    Silver was up 0.5 percent at $21.07 an ounce.
2:54 PM EDT     LAST/    NET   PCT      LOW    HIGH  CURRENT
               SETTLE   CHNG  CHNG                       VOL
US Gold AUG   1326.60   4.60   0.3  1324.00 1334.90  110,333
US Silver SEP  21.117  0.061   0.3   21.050  21.275   42,599
US Plat OCT   1515.00  32.10   2.2  1483.60 1516.70   15,838
US Pall SEP    854.60  11.45   1.4   843.45  855.80    4,214
Gold          1327.70   0.51   0.0  1324.00 1332.10         
Silver         21.070  0.100   0.5   21.030  21.210
Platinum      1503.50  22.85   1.5  1481.80 1511.00
Palladium      850.33  10.23   1.2   844.45  853.65
TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
               CURRENT   30D AVG  250D AVG   CURRENT     CHG
US Gold        116,202   125,074   164,654     13.73   -0.05
US Silver       45,659    69,445    54,508     19.41    0.89
US Platinum     15,938    17,408    12,164     14.69    0.65
US Palladium     4,244     5,261     5,854     20.04    0.43    

 (Additional reporting by A. Ananthalakshmi in Singapore.
Editing by William Hardy, Keiron Henderson, Andre Grenon and
Cynthia Osterman)
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