Singapore: Platinum roared to another record high on Monday as supply concerns persisted in main producer South Africa, lifting sister-metal palladium to its best level in six years and overshadowing gold.
South African mines, which produce four-fifths of the world’s platinum, made slow progress in bringing back production on Friday after the state power firm allowed them only limited increases to their electricity consumption.
Platinum hit a bid high of $1,774 an ounce, up from $1,752/1,759 an ounce late in New York on Friday. Palladium rose to $415.00/419.00 an ounce from $410.00/413.00 an ounce to track gains in platinum.
“There’s buying interest coming from producers. Investment demand for platinum is also picking up especially in Japan,” said William Kwan, a dealer at Phillip Futures in Singapore.
“A couple of Japanese clients keep calling us here, some asked about how to invest in platinum,” he said.
The benchmark platinum futures contract on the Tokyo Commodity Exchange also touched another record high of 5,797 yen per gram to reflect a firm cash market. It later dipped to 5,779 yen, still 98 yen higher than Friday’s close.
After first saying it would be able to meet 90% of the needs of gold, platinum, diamond and coal miners, utility Eskom said last week that generating plant breakdowns meant it could supply only 80% of their needs.
Platinum and palladium are used in jewellery and in vehicle catalysts, where it helps clean exhaust gases.
Spot gold fell slightly to $909.25/910.50 an ounce from $910.00/910.75 late in New York. The metal rallied to a record high of $936.50 on Friday before a rebounding dollar erased much of the gains and dragged down the price to as low as $904.70.
“Friday was a very volatile day. It’s been a while since I’ve seen such erratic moves. $940 seems to be capped,” said Kwan of Phillip Futures.
“If it’s unable to break $940, I believe we might see some follow-through liquidation,” he said.
COMEX’s February gold futures rose $2.8 an ounce to $916.3 an ounce.
The dollar steadied against the euro, holding gains after bouncing from a near-record low hit late last week as a surprise rebound in the factory sector offset data showing the US economy’s first labour market contraction in 4 years.
Bullion trading was expected to slow down in Asia this week, with many dealers away for the Lunar New Year celebration. Markets in Singapore, a centre for bullion trading in Southeast Asia, are closed on Thursday and Friday for the Chinese New Year.
“We might see a low this Thursday. The market is still very much driven by speculation so when liquidation comes in, it can be quite frightening,” said a dealer in Singapore.
“I am looking at $880,” he said.
The physical sector in Singapore saw buying on dips from jewellers in Indonesia but overall trading was slow. Gold bars were on par with the spot London prices, unchanged from last week.
“India hasn’t come yet but I guess they made some purchases when the price dropped last week,” said a dealer, referring to the world’s main consumer.
The euro hardly moved at $1.4805, while the dollar edged up to 106.65 yen.