Asia drives rally; platinum at 26-year high; palladium hits a 17-month mark, gold and silver follow.
NEW YORK (Reuters) – New York platinum futures stormed to a new 26-year high Thursday morning on the third day of speculative and trade buying, while palladium hit a 17-month peak and gold and silver reached 10-day highs.
Dealers said the broad rally in the precious metals was fueled by buying in Asia this week, which spilled over to European and New York sessions amid expectations that growing commercial demand for platinum group metals would keep prices climbing.
“It’s been TOCOM [Tokyo Commodity Exchange] buying that’s been fueling the market,” said a precious metals trader in New York. “The funds and the general public have been very active in platinum the last two nights, but it’s quieter in New York at the open as CTA [Commodity Trading Advisor] buying kind of stalls out here,” he added. “But it feels like in the medium term, platinum’s going to hit $1,000, or at least try up there, because technically it looks pretty good.”
January delivery of platinum at the New York Mercantile Exchange rose $9.80, or nearly 1 percent, to $965.50 an ounce. Benchmark futures had not seen such a peak since they fell from above $1,000 in 1979.
George Gero, a senior vice president at Legg Mason Wood Walker, said stockpiling of platinum and palladium for use in catalytic converters also supported prices.
Both metals are crucial components of antipollution systems in motor vehicles. Platinum is also widely used in fine jewelry, and palladium jewelry recently became a popular, less-expensive option.
Geopolitical news and economic uncertainty have given metals a lift as well, after Wednesday’s deadly bombings in Jordan and a U.S. trade report Thursday morning, Gero said. “At this point, people are waiting to see if the markets are going to go to their next levels.”
Spot platinum climbed to $958/962 an ounce from its previous close at $950/953 in New York.
December palladium rose a sharper 2.25 percent in early trade, up $5.35 at $244 an ounce, with the morning peak of $246.90 its loftiest since June 2004. Spot palladium was quoted at $241/244, up from $233/237 late Wednesday.
Although palladium’s value currently is only 25 percent of platinum’s, sources believed that its rally might have more legs.
“Palladium is starting to catch up here,” said Gero. “It’s a more interesting move from $180 to $245 [since September] than platinum’s [move] from $950 to $960” this week, he added.
In gold, benchmark December delivery futures rose 20 cents to $467.70 an ounce at NYMEX’s COMEX division, in a range of $466.50 to $470.90, which was its highest since Oct. 31.
Gold rose despite the dollar’s rally against the euro, with the greenback withstanding a brief sell-off after the U.S. trade deficit surged in September.
The trade gap rose to a record $66.1 billion in September, shattering the previous high of $60.4 billion set in February, due to record oil prices following Hurricane Katrina and a drop in overall exports.
The record trade gap was much wider than a midpoint forecast of $61.0 billion made by Wall Street economists.
“In gold, there’s good buying in Tokyo. And I think that it was maybe a little oversold in the $450 range and so it has bounced back,” the metals trader said. “It’s trying to consolidate and I think it’s going to grind around up here.”
After gold’s previous rise set off prepositioned buy orders at $462 and $465, traders said, chart resistance at $475 appeared to be the next upside obstacle for the market.
Spot gold was quoted at $467.60/468.40, up from its last close at $461.70/462.50. The late fix by bullion dealers in London on Thursday was at $467.
December silver climbed three cents to $7.71 an ounce, trading from $7.67 to $7.79, which, like gold, was its highest since Halloween. Spot fetched $7.72/74, up from $7.65/67 late Wednesday.
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