New York gold and platinum futures dropped on Tuesday after they climbed to record highs in the overnight sessions, as investors locked in profits ahead of the US Federal Reserve's rate-setting decision.
Top platinum and gold producers in South Africa said they would be back to production soon after a power crisis forced miners in the minerals-rich country to stop operations last week. Precious metals prices fell on the news.
"It's strictly profit taking. Angloplat is still down, and they may be down for a while. So the market is still likely to test the highs," said Ralph D'Esposito, a Nymex platinum group metals floor trader in New York.
At 10:26 am EST (1526 GMT), the active Nymex April platinum was down $41.70 or 2.4 percent at $1,687.00 an ounce, after rising to a fresh record high of $1,734.90 overnight. Spot platinum was quoted at $1,690.00/$1,697.00.
Dealers said that news of supply shortage in an already tight market sparked strong interest by funds and speculators in the white metal. "Yesterday we saw additional fresh longs into the market. I think you will likely to see a pretty good increase in open interest today," D'Esposito said. The dollar edged up against the euro ahead of the Fed meeting. A higher dollar makes gold, which is denominated in the US dollar, more expensive for investors holding other currencies.
Spot gold was quoted at $925.00/925.70 versus Monday's New York close of $927.50/928.20. London bullion dealers fixed the afternoon spot reference price at $924.50.
Comex March silver was up 1.0 cent to $16.760 an ounce, after trading in a range from $16.570 to $16.905. Spot silver was at $16.69/16.74, compared with its last Monday quote of $16.67/16.72. London silver was fixed at $16.75. March palladium dropped $3.35 to $388.00 an ounce and spot palladium was pegged at $384.00/$389.00.
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