Platinum still declines, despite some supply threats

By Leia Michele Toovey- Exclusive to Platinum Investing News

Platinum prices slipped on Monday as the US dollar resumed its rebound against the euro and the pound. Platinum is often used by investors as a hedge against a weakening dollar, so the dollar’s recovery has made the metal less attractive. Platinum futures for September delivery fell US$6.20 to settle at US$1,435 an ounce on the New York Mercantile Exchange.

“There are a lot of unknowns, the outlook for platinum is choppy, and no one is sure where prices will go next”, said Sasha Naryshkine an analyst at private client Asset Manager Vestact.

The precious metal responded the same way In London trading. Platinum for immediate delivery slumped as much as 6.3 per cent to US$1,306.50 an ounce.  But, according to miner Platinum Australia Ltd, the global shortage of platinum is not being reflected by the low price of the metal. Platinum price has dropped more than 30 per cent over the past four months, from its record $2,301.50 per ounce in March to its current level. Platinum Australia Managing Director John Lewins said the platinum market was in deficit last year by 500,000 ounces (oz) but there was demand of seven million oz.

In Tokyo, the scene was a little different. Platinum futures in Tokyo gained for a second day as crude oil prices advanced; prompting speculation higher energy costs will fuel inflation and demand for the metal as a hedge against it. A report released on Monday showed that US gasoline inventories dropped for a fourth week; this spiked oil, and in turn ascended platinum on the Tokyo market.  “The gain overnight in oil prices is a very supportive factor for commodities such as platinum today,” Kazuhiko Saito, a commodity strategist at Interes Capital Management, said Tokyo over the phone from Tokyo.

June-delivery platinum rose 1.6 per cent to close at 4,836 yen a gram (US$1,383 an ounce) on the Tokyo Commodity Exchange. The most-traded contract on August 19 dropped to 4,555 yen a gram, the lowest since August 29, 2007. It may decline to as low as 4,500 yen a gram next week, Saito said. Platinum for immediate-delivery advanced US$15.50 to US$1,395 an ounce at 6 p.m. in Tokyo, a 1.1 per cent jump from yesterday in New York.

 More platinun news….

A shaft in Anglo Platinum’s (AMSJ.J) second-biggest mine remained shut for over a week after a worker died in an accident. The company said it was in talks with the authorities over its resumption. Anglo plat, the world’s largest producer of platinum, said blasting and mining work at the number one shaft at Amandelbult was halted pending a green light from the Department of Minerals and Energy. “It has not resumed since last Monday. What is affected is one shaft, not the entire mine,” explained Simon Tebele, a spokesman for Anglo Platinum. A pending meeting with DME officials will determine when Anglo Plat is allowed to re-open the shaft. Amandelbult produced 195,200 ounces in the half year to June, after it lost 91,100 ounces owing to flooding at the mine. Anglo Platinum’s  owner, the world’s fourth biggest diversified mining company, Anglo American Plc (AGL SJ), witnessed a decline in share values for a third day, losing 1.5 percent.

A strike at Lonmin’s Western Platinum mine, which started on August 22, is over, said a labour union official. “The strike is over and workers are back at work,” said Eliphus Ngoepe, Regional Chairman for the National Union of Mineworkers, over the telephone today. The strike was called in support of 66 workers who were dismissed at the mine, after they had asked for an apology from the management when an underground lift had arrived an hour late.

To get a more in depth perspective on what the platinum market will do, go to palladium investing news to see how that metal is weathering the economic conditions.  Palladium and platinum usually follow the same path, therefore, when investing in one it is a good idea to research the other.

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