Platinum Climbs to Record $1,363 in New York; Palladium Falls
By Halia Pavliva
Sept. 26 (Bloomberg) -- Platinum was little changed after rising to a record $1,363 an ounce as the dollar weakened against the euro, boosting the precious metal's appeal as an alternative investment. Palladium dropped.
Before today, platinum gained 19 percent this year, while the dollar fell 7.2 percent against the euro. The dollar fell to a record against the euro today before rebounding. Global supplies of platinum probably will fall short of demand by 205,000 ounces this year, Impala Platinum Holdings Ltd., the world's second-biggest producer, said on Sept. 6.
``When you look at limited supply and strong global demand, the sky is the limit'' for platinum as the dollar slumps, said Ron Goodis, futures trading director at Equidex Brokerage Group Inc. in Closter, New Jersey.
Platinum futures for January delivery gained 20 cents to $1,358 an ounce at 11:21 a.m. on the New York Mercantile Exchange. The previous record was $1,353.80 on May 7.
Palladium futures for December delivery fell 90 cents, or 0.3 percent, to $342.05 an ounce. Before today, the metal gained 1.3 percent this year.
Platinum and palladium are used to make jewelry and pollution-control devices for cars.
The dollar dropped to a record of $1.4162 per euro. A U.S. government report showed orders for durable goods fell last month more than economists forecast.
``It's quite possible'' that platinum will gain as much as $30 an ounce by the end of the year because the dollar ``will probably weaken further,'' Goodis said. ``The physical demand is good for platinum.''
Inflation
The U.S. Federal Reserve on Sept. 18 lowered its benchmark interest rate by half a percentage point, more than forecast, to 4.75 percent in an attempt to bolster an economy threatened by a housing recession. The cut sparked inflation concerns. Some investors buy precious metals to hedge against rising consumer prices.
``We now prefer platinum to gold,'' UBS AG analyst Robin Bhar said in a report. ``Platinum looks a safer place to express a positive view on precious metals with a combination of strong supply-and-demand fundamentals and relatively light long positioning.''
Gold has climbed 15 percent this year, heading for the seventh straight annual gain, as the dollar dropped against major currencies.
Speculative long positions, or bets prices will rise, outnumbered short positions in Nymex platinum futures by 5,955 contracts on Sept. 18, Commodity Futures Trading Commission data showed on Sept. 21. That was 51 percent below the year's high of 12,276 contracts as of July 27.
Gold Futures
Speculative long positions in gold futures outnumbered short positions by 141,650 contracts on Sept. 18. That's the highest since late February.
Prospects for platinum demand improved after General Motors Corp., the biggest U.S. automaker, agreed on a contract with the United Auto Workers, ending a two-day strike, Goodis of Equidex said. The strike idled workers at more than 80 GM assembly and parts operations in the U.S.
Anglo Platinum Ltd. is the world's largest platinum producer.
To contact the reporter on this story: Halia Pavliva in New York at [email protected] .
Last Updated: September 26, 2007 11:38 EDT
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