November 14, 2012
Platinum group metals (PGM) rallied on Tuesday after on a bullish forecast that supply outages earlier this year could turn the markets into a deficit, while gold traded flat as investors awaited more clarifications on Greek aid by the euro zone.
Palladium rose over 4 percent, on track for its biggest one-day gain since December 2011, after PGM specialist and refiner Johnson Matthey said it expects palladium to record its biggest deficit since 2000 this year as mine supply and sales of Russian state stocks dwindle and auto demand climbs.
Traders cited the closely watched report for PGM’s gains. Johnson Matthey also expects the platinum market to turn to a deficit in 2012 from last year’s surplus on lingering supply fears in South Africa, which holds about 80 percent of the world’s platinum reserves.
“I saw active traders come in to the gold/platinum spread. They were buying two April platinum contracts and selling one April gold, thinking the spread will start to narrow again,” said Phillip Streible, a senior commodities broker at futures brokerage R.J. O’Brien.
The spread between gold and platinum is currently at $150 after it rose to a record $230 in August this year. The fact that the price of gold is trading above that of platinum is considered by most analysts as unusual as platinum is much more rare than gold. Palladium rose 4.2 percent to $630.16 an ounce by 12:03 p.m. EST (1703 GMT), while platinum was up 1.5 percent at $1,583 an ounce.
Gold held steady after Monday’s drop, as the markets focused on a public clash between Greece’s international lenders over how Athens can bring its debts down to a sustainable level. New development on Greek aid could reignite fears that Europe’s troubles could flare up anew, analysts said. Spot gold eased 25 cents to $1,727.49 an ounce. US COMEX gold futures for December delivery were down $2.90 at $1,728 an ounce. Silver, which is widely used by industries, rose 0.8 percent to $32.65 an ounce, tracking PGM’s gains.