Tokyo Platinum Futures Reach Record Amid Iran Tension (Update1)
By Yasumasa Song and Wendy Pugh
Feb. 26 (Bloomberg) -- Platinum futures rose to a record on the Tokyo Commodity Exchange as investors bought precious metals as a haven after Iran defied a United Nations Security Council deadline to halt uranium enrichment.
Tokyo gold futures also reached a 21-year high ahead of a Security Council meeting today to discuss possible further sanctions against the Middle East's second-biggest oil producer over the nuclear issue. Investors often buy precious metals to hedge against the risk of financial turmoil from geopolitical tension, and to protect against inflation led by oil prices.
``Iran's nuclear development has increased geopolitical risks in the Middle East. People are pouring both dollars and yen into gold, platinum and other precious metals that are regarded as being safe assets,'' said Koji Suzuki, a senior analyst at Kazaka Commodity Co. Ltd. ``Fears of inflation caused by rising crude oil prices is also encouraging people to buy platinum.''
December delivery platinum closed up 55 yen, or 1.2 percent at 4,755 yen a gram ($1,223 an ounce). It earlier gained as much as 1.9 percent to 4,787 yen a gram, the highest since platinum was listed on the Tokyo Commodity Exchange on Jan. 26, 1984.
Platinum for immediate delivery rose as much as 1.2 percent to $1,248 an ounce, the highest since Nov. 21. It traded at $1,239.50 an ounce, up 0.5 percent, at 3:57 p.m. Tokyo time.
Platinum, used to make jewelry and in vehicle exhaust systems, has been in demand as governments have been tightening laws on emissions. Shortages have been exacerbated by problems at Lonmin Plc, the world's third-largest platinum producer.
Lonmin Problems
London-based Lonmin increased its estimate for a smelter rebuild for a second time on Feb. 22, saying it would have to rely more on other companies to refine ore to meet sales targets.
The company lost one production shift on Feb. 23 to a strike at its largest mine in South Africa, before settling a dispute over late payment of salaries caused by a new computer system, a National Union of Mineworkers spokesman said today.
A spokeswoman at the Eastern Platinum mine wasn't available for comment when telephoned by Bloomberg.
Gold futures in Tokyo rose to a 21-year high for the third day. Gold for delivery in December 2007 gained as much as 1.5 percent to 2,696 yen a gram and settled at 2,691 yen a gram.
Spot gold rose as much as $5.20, or 0.8 percent, to $687.75 an ounce, and traded at $685.25 an ounce at 4:33 p.m. in Tokyo. The metal, which typically gains during times of geopolitical tension, touched $688.56 on Feb. 23, its highest since May 19.
Gold also gained on tensions over Iran's nuclear program. Iranian President Mahmoud Ahmadinejad yesterday compared his country's nuclear program to a ``train with no brakes'', suggesting that it was unstoppable.
To contact the reporter on the story: Yasumasa Song in Tokyo at [email protected]
Last Updated: February 26, 2007 02:35 EST
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