Platinum futures in New York dipped to end below a previous near-26-year peak on Tuesday, as bullish speculators lightened up on long positions after a five-session buying spree, dealers and analysts said.
In the other precious metals, palladium and gold also eased in muted trading, but silver managed to creep higher. In its Platinum 2005 Interim Review, refiner Johnson Matthey said that the global platinum market is expected to remain in deficit in 2005 and that prices should trade from $890 to $1,030 an ounce over the next six months.
Platinum for January 2006 delivery at the New York Mercantile Exchange finished down $1.10 at $974.90 an ounce, in a session range of $978 to $961.
Profit taking by funds weighed after the contract on Monday rallied to a life-of-contract high of $980, which marked the loftiest level for benchmark futures since March 1980.
"Prices fell back overnight before the Johnson Matthey report today, with spot platinum nearing $950, but it has bounced quite nicely again after the report," one New York-based PGMs analyst said.
Johnson Matthey predicted that platinum could soon test the big $1,000 level again a mark not seen since 1980 when it was slipping off the all-time of $1,045 on further fund and speculator buying.
"No doubt, substantial interest from funds has pushed the price up," said Mike Steel, JMS's director of market research, in a briefing in New York.
"We think the magic figure of $1,000 could be exceeded if there is extra fund buying." Demand for the white metal, which is used mainly in jewellery and to clean car exhaust emissions, was forecast to rise by 2 percent to 6.71 million ounces in 2005, while supplies were also seen rising by 2 percent to 6.59 million ounces.
The company also said that palladium supply surplus was expected to decline by more than 50 percent to 650,000 ounces this year from last year.
Spot platinum at last check was worth $967/972 an ounce, against $970/974 late in New York on Monday. December palladium futures fell $2.85 to close at $251.70 an ounce, trading from $247 and $254.60.
On Monday, the contract rallied to $258.90, it's priciest since May 2004. Spot palladium was trading a little lower at $244/248, vs. its prior close at $249/253.
Meanwhile, gold and silver futures pared gains following a stronger-than-expected rise in producer prices, which reinforced expectations of higher interest rates and held the dollar around its two-year highs against the euro.
At Nymex's Comex division, benchmark December gold dipped 10 cents to $469 an ounce, after dealing from $470.80 to $467.20. Estimated volume was a moderate 58,000 contract, bolstered by speculators accelerating their contract rollover before December delivery period begins.
Prices inched back toward unchanged as the euro rose to $1.1695 in late trade, from around $1.1691 on Monday. US producer prices unexpectedly rose 0.7 percent in October as surging costs of natural gas and home heating oil outweighed cheaper gasoline, but prices outside of food and energy ticked 0.3 percent lower, despite economist forecasts for a 0.2 percent increase.
Separately, the Bank of France will use proceeds from planned gold sales to diversify the foreign exchange component of its reserves investing more in high-yield currencies.
The BOF plans to sell up to 600 tonnes of its reserves of 3,024 tonnes over a five-year period. Spot gold traded to $467.90/468.60 an ounce, against on Monday's New York late quote of $467.60/468.40.
Bullion dealers in London set the afternoon spot reference price at $468.25. December silver was the only gainer, up 0.50 cent at $7.787 an ounce, moving from $7.70 and $7.84.
Spot changed hands at $7.74/76 from $7.74/76 late on Monday. It fixed at $7.77.
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