Gold edged lower as US and European stock markets rose further on Thursday, with trading muted ahead of the Easter break. Platinum and palladium both rose to multi-month highs, however, as investment demand was boosted by news that new exchange-traded products linked to the platinum group metals are being planned.
Spot gold was at $878.40/880.40 an ounce at 1457 GMT against $879.55 late in New York on Wednesday. US gold futures for April delivery on the COMEX division of the New York Mercantile Exchange eased $5.50 to $879.30 an ounce. "I dont think we will see a great deal of action on gold," said Commerzbank analyst Eugen Weinberg.
The metal eased as equities rose in Europe and the United States, after upbeat quarterly results from Wells Fargo fuelled optimism the banking sector will stabilise. Elsewhere platinum rose to a 6-1/2 month high of $1,210 an ounce, and was later at $1,196.50/1,206.50 against $1,174.50. Palladium touched a peak of $236 an ounce, and was later at $232.50/237.50 an ounce against $230.50.
Platinum and palladium are benefiting from strong investment flows as buyers expect demand for the metal used in autocatalysts will rise in the second half of the year. South Africas Absa Capital said on Thursday it plans to launch an exchange-traded note in the second half of 2009 to give investors exposure to the spot price of platinum.
ETF Securities said holdings of its platinum-backed exchange-traded commodities in the UK and Australia rose 16,869 ounces in the week to Wednesday to stand at 326,799 ounces. The platinum group metals were boosted earlier this week by news the company has filed with the Securities & Exchange Commission to register platinum and palladium trusts in the United States.
"It is clear that many market participants have positioned themselves ahead of a potential platinum ETF product," said one London-based analyst. Holdings of the worlds largest gold-backed ETF, New Yorks SPDR Gold Trust, were unchanged on Wednesday for the fourth straight session, raising fears investor demand for the precious metal may be stagnating.
However, in Europe Julius Baer said holdings of the gold ETF it operates rose 72,000 ounces or 7 percent on Wednesday to a record 1,076,575 ounces. On the supply side, South Africa, the worlds number three gold producer, said its output of the precious metal was up 2.7 percent in February from a year before. Among other precious metals, spot silver edged down to $12.22/12.29 an ounce from $12.25.
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