Singapore: Platinum tumbled almost 3% on Wednesday, led by selling in Japan ahead of new margin rules in Tokyo, and as investors booked profits after pushing up the price to a 14th straight record high the previous day.
Spot platinum fell to $2,080/2,090 an ounce from $2,140/2,150 late in New York on Tuesday, when it rallied to $2,160 on speculative buying driven by fears of tight supplies after power shortages disrupted mining in South Africa.
Sister metal palladium briefly hit a six-year high, while gold surrendered early gains as crude oil slipped after hitting a record high above $100 a barrel on Tuesday.
“People are nervous because platinum prices have risen too rapidly,” said Yukuji Sonoda, precious metals analyst at Daiichi Commodities in Tokyo.
“This is only temporary. The South African problem is quite unchanged. It tends to get worse day by the day,” said Sonoda, who pegged support at $2,000 an ounce.
Platinum has gained more than 30% in 2008 after mines in South Africa, which accounts for four-fifths of the world’s supply, ground to a halt for five days at the height of last month’s power crisis.
The benchmark contract for December 2008 delivery on the Tokyo Commodity Exchange ended the morning session 190 yen per gram lower at 6,950 yen. It hit a new record of 7,207 yen before tumbling to a low of 6,901 yen.
TOCOM will raise margins by 50,000 yen per contract for all new positions and existing positions for all six platinum futures contracts from Thursday until the end of the month to cope with rising volatility.
“The market has been surging and psychological pressure was already growing as platinum has been overbought. TOCOM’s margin increase from tomorrow became a good reason to prompt corrective sales in Tokyo,” Shuji Sugata, manager at Mitsubishi Corp Futures and Securities Ltd, said.
“But we have to remember that fundamentals stay unchanged with the situation in South Africa unclear, so there will be plenty of buyers willing to buy on dips,” Sugata said.
Last week, South African electricity utility Eskom invited tenders for power generating plants that can be operating by June 2012 as the company struggled to deal with chronic power shortages which have crippled the country’s mining sector.
Palladium hit a bid high of $495 an ounce but then dropped to $473/479 an ounce, down from $491.00/494.00 late in New York.
Gold fell to $925.90/926.70 an ounce from $927.00/927.80 an ounce late in New York. Silver edged up to $17.51/17.56 an ounce from $17.36/17.41 an ounce.
Oil eased on Wednesday after surging nearly 5% to a record above $100 a barrel a day ago amid an influx of fresh investor capital into the commodities sector and concerns that OPEC will not hike output next month.