* South African police deployed to the platinum belt
* SPDR sees 2.39 T outflow, first drop since May 2
* U.S. equities' record highs, dollar's gain pressure gold
* Coming up: U.S. Producer Price Index on Wednesday
(Updates market activities)
By Frank Tang and Jan Harvey
NEW YORK/LONDON, May 13 Platinum and palladium
each rose 1 percent on Tuesday on the back of lingering supply
worries as South Africa sent more police to the strike-hit
platinum belt to protect miners after four were killed returning
to work over the weekend.
Gold prices, meanwhile, eased 0.1 percent as investors
digested news U.S. retail sales braked sharply in April but that
did little to change views the economy was poised for faster
growth this quarter. An intraday record high in U.S. equities,
measured by the S&P 500 above 1,900 for the first time,
kept a lid on the metal.
The four-month strike in South Africa, the longest and most
costly bout of industrial action in the world's top platinum
producer, has halted nearly 40 percent of normal global platinum
"A sudden end to the strike would lead to a sharp drop, but
we believe the market is working under a structural
production/consumption deficit, and we are therefore bullish
medium- to longer-term," said James Steel, chief precious metals
analyst at HSBC.
Spot platinum climbed 1.1 percent to $1,448.25 an
ounce by 3:26 p.m. EDT (1926 GMT) and palladium rose 1.2
percent to $812.40 an ounce.
U.S. NYMEX platinum contract for July delivery
settled up $14.10 at $1,456 an ounce, with volume at 13,000
lots, about 40 percent above its 30-day average, preliminary
Reuters data showed.
Platinum stretched its premium over gold to its highest
level since mid-January at around $155 an ounce as producers
pushed ahead with plans to resume production.
Palladium prices also climbed on supply worries due
to continued tensions near the border of Ukraine and Russia, the
top producer of the metal.
On Tuesday, six Ukrainian soldiers were killed and eight
wounded in an ambush by pro-Russian separatists near the eastern
Ukrainian town of Kramatorsk, according to Ukraine's defense
GOLD INVESTMENT DEMAND SOFT
Tensions over Ukraine underpinned gold's safe-haven appeal,
but lackluster investment demand triggered bullion selling,
Investor wariness was already showing, with the SPDR Gold
Trust, the world's top gold-backed exchange-traded fund,
recording an outflow of 2.39 tonnes to 780.46 tonnes on Monday,
the first outflow since May 2.
Spot gold dipped 0.1 percent to $1,293.70 an ounce,
while U.S. COMEX gold futures for June delivery settled
down $1 at $1,294.80.
"What's pointing to lower prices are the stronger equity
markets, the firmer dollar," Commerzbank analyst Daniel
The dollar index rose against the euro and a basket
of other currencies after a sharp decline in investor morale in
Germany, Europe's largest economy.
U.S. equities were up slightly after both the Dow Jones
industrial average and the Standard & Poor's 500 Index rose to
intraday record highs earlier in the session.
The yellow metal is still up 7 percent this year mainly
because of a strong first quarter, with prices little changed
from the beginning of April.
Among other precious metals, silver inched down 0.1
percent to $19.49 an ounce.
3:26 PM EDT LAST/ NET PCT LOW HIGH CURRENT
SETTLE CHNG CHNG VOL
US Gold JUN 1294.80 -1.00 -0.1 1289.10 1299.00 115,416
US Silver MAY 19.504 0.004 0.0 19.395 19.535 30
US Plat JUL 1456.00 14.10 1.0 1435.60 1461.90 12,957
US Pall JUN 817.30 8.55 1.1 802.05 818.65 4,935
Gold 1293.70 -1.60 -0.1 1289.40 1298.60
Silver 19.490 -0.010 -0.1 19.370 19.590
Platinum 1448.25 16.20 1.1 1435.50 1457.00
Palladium 812.40 9.50 1.2 805.00 817.00
TOTAL MARKET VOLUME 30-D ATM VOLATILITY
CURRENT 30D AVG 250D AVG CURRENT CHG
US Gold 135,396 133,152 179,965 14.5 -0.36
US Silver 28,658 60,850 55,826 22.6 0.19
US Platinum 13,209 9,327 12,433 15.99 0.47
US Palladium 5,982 5,954 5,742 24.98 1.09
(Additional reporting by A. Ananthalakshmi in Singapore;
Editing by Jane Baird, Alden Bentley and Jan Paschal)