November 13, 2012 / 2:00 PM / 7 years ago

PRECIOUS-Palladium, platinum rally after report, gold flat

* Palladium posts biggest daily gain in almost a year
    * Platinum market set to turn into deficit this year too
    * Gold flat as market eyes latest news on Greek aid
    * Coming up: U.S. retail sales, producer prices Wednesday

    By Frank Tang
    NEW YORK, Nov 13 (Reuters) - Platinum group metals (PGM)
rose sharply on Tuesday after a bullish forecast that production
outages earlier this year could create a supply deficit, while
gold traded flat as investors awaited more clarifications on
Greek aid by the euro zone.
    Palladium rose over 4.5 percent for its biggest one-day gain
in almost a year, after PGM specialist and refiner Johnson
Matthey said it expects palladium to record its biggest deficit
since 2000 this year as mine supply and sales of Russian state
stocks dwindle and auto demand climbs. 
    Traders cited the closely watched report for PGM's gains.
Johnson Matthey also expects the platinum market to turn to a
deficit in 2012 from last year's surplus on lingering supply
fears in South Africa, which accounts for 70 percent of the
world's supply. 
    "I saw active traders come in to the gold/platinum spread.
They were buying two April platinum contracts and selling one
April gold, thinking the spread will start to narrow again,"
said Phillip Streible, a senior commodities broker at futures
brokerage R.J. O'Brien.    
    The spread between gold and platinum is currently at $150
after it rose to a record $230 in August this year. The fact
that the price of gold is trading above that of platinum is
considered by most analysts as unusual as platinum is much more
rare than gold.
    Palladium rose 4.6 percent to $633 an ounce by 2:29
p.m. EST (1929 GMT), while platinum was up 1.4 percent at
$1,581.99 an ounce.
    Months of unrest in the South African mining sector have hit
platinum production, which in turn slowed palladium and other
PGM's output. Investors remain wary about platinum supplies
after the most damaging strikes since the end of apartheid.
    South African production is expected to fall more than 12
percent this year to 4.25 million ounces, its lowest since 2001.
    Barclays strategists said in a note that the scope for
further reduction appeared limited given the extent of the
production losses and the pick-up in prices, but expectations
for demand from Europe remained disappointing.

    Gold held steady after Monday's drop, as the markets focused
on a public clash between Greece's international lenders over
how Athens can bring its debts down to a sustainable level.
    New developments on Greek aid could reignite fears that
Europe's troubles could flare up anew, potentially boosting
safe-haven buying in gold, analysts said.
    Spot gold eased 0.1 percent to $1,725.94 an ounce.
    U.S. COMEX gold futures for December delivery settled
down $6.10 at $1,724.80 an ounce, with trading volume slightly
above its 30-day average, preliminary Reuters data showed.
    Silver, which is widely used by industries, rose 0.4
percent to $32.52 an ounce, tracking PGM's gains.
 2:29 PM EST     LAST/    NET   PCT      LOW    HIGH  CURRENT
                SETTLE   CHNG  CHNG                       VOL
 US Gold DEC   1724.80  -6.10  -0.4  1717.60 1733.30  129,961
 US Silver DEC  32.487 -0.035  -0.1   32.100  32.830   44,723
 US Plat JAN   1586.40  19.90   1.3  1557.40 1595.00   11,628
 US Pall DEC    636.60  28.55   4.7   602.10  637.80    7,572
 Gold          1725.94  -1.80  -0.1  1718.60 1732.60         
 Silver         32.520  0.130   0.4   32.160  32.800
 Platinum      1581.99  21.75   1.4  1558.25 1589.24
 Palladium      633.00  28.03   4.6   606.00  634.97
 TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
                CURRENT   30D AVG  250D AVG   CURRENT     CHG
 US Gold        151,542   149,890   177,286     15.43   -0.44
 US Silver       54,576    41,873    55,951     24.38    0.44
 US Platinum     11,884     8,893     9,465        19    0.16
 US Palladium     8,321     3,457     4,495
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