Platinum Rises to 6-Month High on Demand Outlook; Gold Gains
By Nicholas Larkin
April 9 (Bloomberg) -- Platinum rose to a six-month high in London on speculation that improving auto sales and a potential new exchange-traded fund will increase demand for the metal. Gold also gained.
China’s passenger car sales rose 10 percent in March from a year earlier, while a Toyota Motor Corp. spokesman today said it canceled production cuts in France this month, as German demand partially offset declines elsewhere in Europe. An ETF Securities Ltd. unit on April 2 filed registration documents with the U.S. Securities and Exchange Commission for platinum and palladium trusts backed by physical metal.
“News on the potential ETFs and of course car sales data out of China” are positive for prices, Afshin Nabavi, a senior vice president at MKS Finance SA, one of Switzerland’s four bullion refiners, said by phone from Geneva today.
Platinum for immediate delivery gained as much as $34.25, or 2.9 percent, to $1,213.75 an ounce, the highest since Sept. 25. It traded at $1,209 as of 12:20 p.m. in London. The metal has advanced 29 percent this year after plunging 39 percent in 2008, its worst performance since at least 1987. Palladium rose as much as 1.5 percent to $237 an ounce, the highest since Nov. 6, and last traded at $234.50.
Automakers account for about half of global platinum and palladium use, according to metals researcher and refiner Johnson Matthey Plc.
Most commodities advanced and stocks rose today on speculation that government measures to revive economies and rescue financial firms are working. Japan may unveil a $154 billion stimulus plan, while the New York Times reported all 19 banks examined to determine their viability if the recession deepens will pass the review.
Gold Advances
Gold for immediate delivery rose $4.27, or 0.5 percent, to $884.77 an ounce in London. Still, the commodity is heading for a third weekly decline. June futures were little changed at $885.80 an ounce in electronic trading on the New York Mercantile Exchange’s Comex division.
The Bank of England today kept interest rates unchanged at 0.5 percent and said it will continue a three-month program to purchase 75 billion pounds ($110 billion) of assets to bolster the economy.
The BOE’s decision to continue with so-called quantitative easing may benefit gold prices as investors buy bullion as a hedge against future inflation and a potentially weaker pound, said Bayram Dincer, a commodity analyst at Dresdner Bank in Zurich, before the central bank’s announcement.
Gold Forecast
JPMorgan Securities Ltd. raised its 2009 gold forecast to $960 an ounce, from $831, as government spending may accelerate inflation and devalue the dollar, the bank said in a report dated yesterday.
Investment in the SPDR Gold Trust, the biggest exchange traded fund backed by bullion, was unchanged for a third day at 1,127.37 metric tons yesterday. Assets in the fund, which has overtaken Switzerland as the world’s sixth-largest gold holding, reached a record 1,127.44 tons on April 2.
“Given the lack of fresh investment interest through the SPDR ETF and steadier tone in equities we may have to see gold move lower before fresh demand is stimulated,” James Moore, an analyst at TheBullionDesk.com in London, wrote in a note today.
Bullion rose to $883.75 in the morning “fixing” in London, used by some mining companies to sell production, from $880 at yesterday’s afternoon fixing. Spot prices, which reached a record $1,032.70 in March 2008, are little changed this year.
Silver added 0.3 percent to $12.315 an ounce. JPMorgan raised its 2009 forecast for the metal to $13.90 an ounce, from $11.
To contact the reporter on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net
Last Updated: April 9, 2009 07:45 EDT
