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PRECIOUS-Platinum up for 7th day as South Africa crisis stirs supply fears
January 16, 2013 / 4:45 PM / in 5 years

PRECIOUS-Platinum up for 7th day as South Africa crisis stirs supply fears

* Platinum trades at premium to gold for second day
    * Posts 9 pct rise over past seven sessions
    * Platinum's technical RSI shows market overbought
    * Germany plans to repatriate gold held in U.S., France
    * Coming up: U.S. housing starts, jobless claims Thursday

 (Updates prices to market close)
    By Frank Tang
    NEW YORK, Jan 16 (Reuters) - Platinum rose for a seventh
consecutive session on Wednesday, driven by strong hedge fund
buying after a mine labor crisis at the world's largest platinum
producer in South Africa stirred fears of a supply shortage.
    The price of platinum also stayed above that of gold for a
second straight day when Anglo American Platinum in
South Africa said it would shut two mines and cut 14,000 jobs.
The move is expected to widen the platinum market's deficit in
2013 in an already tight market due to strong autocatalyst
demand.
    Buying by momentum-driven hedge funds and money managers has
fueled platinum's 9 percent rally in the past seven sessions,
sending the market deeper into an overbought territory. The U.S.
EFTS Platinum Trust also posted an increase in its
platinum holdings so far in January.
    Tim Murray, general manager of precious metals marketing at
Johnson Matthey USA, said the funds still see platinum fairly
cheap given what's going on in South Africa.
    "I will not be surprised to see a sell-off and then a
rebound again. It's going to be very volatile," Murray said. 
    Spot platinum rose 0.4 percent to $1,685.52 an ounce
by 2:02 p.m. EST (1902 GMT), h overing near a three-month high of
$1,699.50 set on Tuesday.
    On technical charts, spot platinum's relative strength index
(RSI) shot to 77 from 67 last Friday, above 70 in an area
traditionally considered by analysts as overbought.
    Dealers and analysts said prices were likely to stay firm,
underpinned by labor strikes at three of Amplats' South African
mines. The world's top producer on Tuesday announced plans to
mothball shafts and cut jobs that would reduce output by around
400,000 ounces annually, or around 1 percent of total supply.
    The platinum market largely ignored news that Amplats miners
will end an illegal walkout from Wednesday night and want talks
to prevent further action. 
    Palladium rose 2 percent to $722.50 an ounce.
         
    SHORT-TERM PRESSURE FOR GOLD
    Gold prices was up 0.2 percent to $1,682 an ounce,
overshadowed by rallies in the platinum group metals.
    U.S. COMEX gold futures for February delivery settled
down 70 cents at $1,683.20 an ounce, with trading volume largely
in line with its 250-day average.
    Gold and platinum hit parity for the first time since March
on Tuesday.
    Year to date, gold was up 0.3 percent, sharply
underperforming platinum, which posted a 10 percent gain.
    The yellow metal should find underlying support in coming
months from dollar weakness, which should send prices to a
record average high, consultancy Thomson Reuters GFMS said.
 
    The gold market was little changed after news Germany's
central bank plans to bring home hundreds of tonnes of gold
currently held by the U.S. Federal Reserve in New York and the
Bank of France in Paris. 
    Spot silver rose 0.4 percent to $31.49. 
 2:02 PM EST     LAST/    NET   PCT      LOW    HIGH  CURRENT
                SETTLE   CHNG  CHNG                       VOL
 US Gold FEB   1683.20  -0.70   0.0  1673.00 1684.70  127,437
 US Silver MAR  31.542  0.013   0.0   31.090  31.570   28,457
 US Plat APR   1694.10   4.20   0.2  1657.10 1700.00   17,588
 US Pall MAR    726.45  13.10   1.8   705.65  727.90    6,592
                                                              
 Gold          1682.00   3.50   0.2  1674.16 1684.50         
 Silver         31.490  0.140   0.4   31.120  31.540
 Platinum      1685.52   7.27   0.4  1661.50 1694.50
 Palladium      722.50  14.00   2.0   708.25  724.50
                                                              
 TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
                CURRENT   30D AVG  250D AVG   CURRENT     CHG
 US Gold        168,972   144,717   174,184     14.34    0.09
 US Silver       30,497    41,535    53,246     23.35    0.40
 US Platinum     17,871    15,078    10,643     19.55    0.62
 US Palladium     6,658     3,328     4,786                  
                                                              
     

 (Additional reporting by Clara Denina in London; Editing by
Grant McCool)

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