Jan. 19 (Bloomberg) -- Platinum climbed to a 17-month high on speculation investment and industrial demand will increase. Gold rose as the dollar weakened.
Palladium advanced for a fifth day to the highest since July 2008. The metal held in ETF Securities Ltd.s exchange- traded commodities products rose 2.6 percent to a record 679,938 ounces on Jan. 15, according to the companys Web site. Platinum and palladium are used mainly in catalytic converters that curb pollution from automobiles.
Assets are obviously being reallocated in favor of the newly issued platinum and palladium ETFs, Commerzbank AG analysts led by Eugen Weinberg, said in a note. They seem to establish themselves as a large demand component alongside the jewelry and car industry demand.
Platinum for immediate delivery rose as much as 0.4 percent to $1,629.25 an ounce, the highest price since Aug. 6, 2008, and traded at $1,625.50 at 8:32 a.m. in Singapore. Futures on the Comex division of the New York Mercantile Exchange jumped 2 percent to a 17-month high of $1,627.90 an ounce as the market reopened after a U.S. holiday yesterday.
One ounce of platinum costs about $489 more than an ounce of gold, a spread not seen since Lehman Brothers Holdings Inc.s filed for bankruptcy in September 2008. Platinum prices dipped briefly to less than gold for the first time in 12 years in December 2008.
The ETFS Platinum Trust and ETFS Palladium Trust started trading on the NYSE Arca stock exchange on Jan. 8, data compiled by Bloomberg show. The funds are backed by physical metal, according to notices published on the Web site of ETF Securities Ltd.
China Autos
Immediate-delivery palladium gained as much as 1 percent to $463.25 an ounce, the highest price since July 4, 2008, while futures in New York added as much as 3.1 percent to $461.50 an ounce, the highest since July 7, 2008.
Support also comes from China, where up to 17.2 million vehicles are expected to be sold this year, a 26 percent increase from last year, said Weinberg. China overtook the U.S. as the worlds largest auto market in 2009, ending more than a century of American dominance.
The dollar declined for a second day against a basket of six currencies, helping boost demand for precious metals as alternative investments. Gold for immediate delivery rose for a second day to $1,136.60 an ounce, and silver climbed 0.5 percent to $18.7250 an ounce by 8:45 a.m. in Singapore.
To contact the reporter on this story: Glenys Sim in Singapore at [email protected]
Last Updated: January 18, 2010 20:52 EST
NKP Price at posting:
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