Platinum held steady on Thursday in quiet trade following a speculative sell-off the previous day on liquidation ahead of a US holiday, while gold held firm on a weaker US dollar and strong physical demand.
The metal tumbled 7 percent on Wednesday on profit taking after rumours of the launch of an exchange-traded fund sent the metal to a record high the previous day of $1,395. "Platinum fell sharply as investors took profits from the recent ETF speculation-related price spike," said Peter Richardson, Chief Metals Economist at Deutsche Bank in a daily note.
"Stronger physical demand ahead of the upcoming two-day Thanksgiving holiday in the US supported gold prices." Platinum was at $1,150.00 an ounce, roughly steady with levels late in New York and further from the record of $1,395 hit in the week.
A national holiday in Japan also thinned trade, traders said. Platinum had advanced over 30 percent in a month on the ETF rumours before the sell-off, which set in after a lack of confirmation about a product launch and profits taking. ETFs, often backed by a physical commodity, enable investors to trade securities on an exchange and give investors a return based on commodities prices, without trading futures or taking physical delivery.
"There was talk about the launch of an ETF and then it was denied sending the market back down, and now it's quietened down," said Ronald Lunge, Lee Cheong Gold Dealers Ltd in Hong Kong. "I don't think the ETF can easily be launched as the liquidity for platinum is not so strong, it's not so easy to buy so much."
A weaker dollar and pre-holiday squaring supported spot gold with prices at $628.80/629.80 an ounce hardly changed from $629.90 late in New York.
Financial markets were closed in Japan on Thursday. Benchmark gold futures on the Tokyo Commodity Exchange closed 11 yen per gram higher on Wednesday at 2,399 yen per gram.
The dollar was stuck near a 5-1/2-month low against the euro and a two-month low against the yen on Thursday as thin volume added to the souring view on the currency. The dollar was at $1.2929 against the euro, not far from the top of its 1-1/2-year trading range of $1.2980, and 116.67 against the yen. Silver was at $13.04/13.11 an ounce, even with levels late in New York. Palladium was at $322.50/327.50 an ounce from $322/327.