Platinum rose to $852 an ounce in Asia on Wednesday, its highest price since April 22, before losing some of the gains to profit taking in the afternoon.
Spot gold fell to $396.50/397.25 an ounce from $399.90/400.40 in New York, undermined by a firmer outlook for the dollar after the United States raised interest rates.
The euro was at around $1.2230, little changed from late New York levels but below the $1.2305 it fetched before the Fed raised interest rates by a quarter percentage point as expected, reaffirming its bullish view on the US economy.
Dealers said platinum was led higher by buying in Japan, a large consumer of the white, lustrous metal used in auto emission systems and jewellery, on concern about tight supplies.
Some dealers expected the metal to regain $900 an ounce in the next few weeks because of steady demand.
Platinum touched a peak of $942 an ounce in mid April on supply concerns. "The physical market in platinum remains healthy, with Japanese imports of platinum of just over 900,000 ounces during the first half of 2004, their highest level since 1999," the Commonwealth Bank of Australia said in monthly report.
"Japanese vehicle production remained firm in Q2, raising the demand for platinum for use in catalytic converters," it said. In the afternoon, spot platinum was quoted at $842/847 an ounce, down from $845/850 in New York on Tuesday, when it rose more than $14.
In Tokyo, the June platinum contract rose 37 yen per gram to 2,907 yen on a volume of 33,361 lots. It had touched a high of 2,915 yen. "The fundamentals are still okay, but it's summer time now.
If the orders from the physical side drop, there will be some kind of correction," said a dealer in Tokyo. Bullion traders said they would wait for Thursday's weekly US jobs figures and July retail sales data.
"It (gold) is left watching the US dollar, which in turn will be watching US economic data for any clues on the state of the economy," said N M Rothschild in a report. In Tokyo gold futures, the benchmark June 2005 gold contract was unchanged at 1,419 yen per gram. Palladium was at $215/220 an ounce, versus $213/218 in late US trade.
Silver fell to $6.63/6.65 an ounce from $6.69/6.72 in New York, tracking declines in the bullion market. The metal hit $6.86 an ounce on August 6, its highest level since April 20. "Physical demand for silver should pick up in the next week or so, as demand from jewellery manufacturers starts to gather pace," said the Commonwealth Bank of Australia (CBA).
"In India, the onset of religious festivals and the marriage season should start to boost demand, and later in August jewellery exporters will start to gear up for Christmas," it said.
India is the world's top buyer of gold and also a big consumer of silver used in jewellery, electronic and photography.
The CBA sees a trading range of $5.50 to $7 an ounce over the second half of this year.
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