New York platinum futures retraced heavy initial losses to finish slightly down on bargain hunting, while gold and silver contracts fell but moved off their lows in a broad-based metals recovery. A sharp rally in crude oil prices also powered gold to recover as investors to hedge against inflation use bullion.
"The (platinum) market in general is very illiquid. We've reached monster heights extremely quickly. The rule of thumb is staircase up but elevator down. Any sell-off will come extremely hard and much more swiftly than the rise up," said one precious metals broker in New York.
The active Nymex platinum contract for April delivery settled down $2.60 to 2,039.10 an ounce, more than $100 above its session low of $1,925.60. It hit a peak of $2,089.90. Spot platinum fetched $1,980/1,990. Platinum futures had dropped more than $350 in the last two sessions on the news that top producer South Africa's power utility Eskom would let mines raise power use to 95 percent from 90 percent.
The South Africa government said on Friday the power plan would be phased in over the next two weeks to avoid worsening an electricity crisis. "Given the rapid scale of the metals rally, (platinum) will remain vulnerable to further pullbacks.
Chart support below should be found at $1,970 (spot) and below at $1,926," James Moore, an analyst of TheBullionDesk.com in London, told clients in a note. However, lingering supply concerns in tight platinum market prompted investors to buy at lower prices late on Monday's session.
Nymex June palladium dropped $10.85, or 2.2 percent, to close at $484.15 an ounce. Spot palladium was at $467/472. Gold and silver contracts also recovered from their session low as a rebound of the platinum group metals supported entire precious metals complex.
Comex's may silver finished 46.5 cents, or 2.3 percent, lower to end at $19.785 an ounce, hurt by selling by investment funds. It traded between a bottom of $19.280 and a high of $20.495. Spot silver fell to $19.64/19.69 from $20.16/20.21 at Friday's close. London silver was fixed at $19.57. "The silver ETFs (exchange-traded funds) are selling. That's about it," said one floor trader in New York.
Record high crude oil prices also helped gold and silver to recover. US crude futures settled up $2.75 at $107.90 a barrel, after rising to an all-time high of $108.21.
The active gold contract for April delivery on the Comex division of the New York Mercantile Exchange closed down $2.40 at $971.80 an ounce, after bottoming at $961.90. It had touched a session high of $982.80. At 2:15 pm EDT (1852 GMT), spot gold was quoted at $974.10/974.90, up from $972.60/973.40 at the close on Friday. London bullion dealers fixed the afternoon spot price at $969.25 an ounce.
"It seems that we'd made a top last week around $992 and we couldn't break through it. We might be projecting lower but regaining ground. Expect a test up in the medium term," the New York broker said. Comex estimated final gold futures volume at 141,247 contracts and gold options at 4,856 lots. Total turnover in Chicago Board of Trade electronic 100-oz gold futures was 23,412 lots at 2:52 pm.
Comments
Comments are closed.