Gold hovered just below a 16-year high in Asian trading on Friday as platinum hit a six-week high ahead of a key report that is expected to lower its forecast for a platinum surplus. Spot gold was at $435.00/435.75 an ounce, against $434.35/435.10 late in New York and below the $437.25 high set on Wednesday. Platinum jumped to $867/873 an ounce from $850.50/855.50 in New York, on speculative buying in Japan ahead of Tuesday's release of precious metals refiner Johnson Matthew's 2004 interim report.
The Tokyo platinum futures market speculated that Johnson Matthew would lower its forecast for a platinum surplus, estimated by some Japanese traders at around 3.9 tones this year.
"Japanese traders presume that Johnson Matthew will change its tune," said Yukuji Snood, a precious metals analyst at Daiichi Commodities in Tokyo. In Tokyo, benchmark October platinum futures rose 52 yen per gram to 2,891 yen, defying a firm yen that normally induces profit taking.
Johnson Matthew has said platinum and palladium supplies would surge this year, thanks to South African and North American output running well ahead of 2003 levels.
It has also said platinum purchases for making jewellery dropped 19 percent to 1.2 million ounces in 2003 in China, the first decline since the market started to develop in the country in the mid-1990s.
China is the world's largest consumer of platinum jewellery. The precious metal is also used in auto catalysts used to clean exhaust fumes. Worries about slowing Chinese demand had weighed on the platinum market for much of this year, leading to speculation there was a build-up in stocks in China.
But some dealers said a firm gold market would provide some support for platinum, which will also benefit from tougher anti-pollution laws in Europe and Japan's emission restrictions for diesel trucks from 2005.
Some dealers said that platinum, which hit a 24-year peak at $942 in April, would rebound to $930 an ounce by the end of this year. Dealers said tensions in the Middle East would underpin the bullion market, which would also look to the currency market for direction. Investors tend to seek gold as a safe-haven during times of political or economic uncertainty.
The dollar was steady at $1.2913 per Euro.
"Sentiment still remains positive given the US dollar's weakness, high oil prices and geopolitical concerns, recently heightened by fighting in Iraq and the death of Palestinian leader Yuasa Arafat," N M Rothschild said in a report.
The Tokyo benchmark October gold contract lost four yen at 1,486 yen. Palladium was unchanged from New York's late quoted levels at $212/217 an ounce.
Silver stood at around $7.47/7.49 an ounce, up from $7.43/7.46 in New York.
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