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Platinum declines as ETF holdings post biggest drop in 6 months

“Prices are being driven by weak investor sentiment”.
Platinum fell for the first time in three days as investors sold holdings of exchange-traded funds backed by the metal at the fastest pace in six months.

Global holdings in platinum ETFs were down 1.2 percent to 82.65 tons as of yesterday, the biggest drop since May. In November, holdings have fallen on all but five days. The metal is down 11 percent this year as concerns about slowing economies outside the U.S. and the dollar’s rally curbed commodities demand.

“Prices are being driven by weak investor sentiment,” Joni Teves, an analyst at UBS AG in London, said by phone today. “There has been a lot of disappointment with platinum’s performance in the first half.”

Platinum for immediate delivery slid 0.6 percent to $1,220.75 an ounce at 2:40 p.m in London. Earlier, it fell as much as 1.1 percent.

Among precious metals, gold was little changed while silver declined as lower oil prices spurred concerns about deflation. Holdings in the SPDR Gold Trust fell yesterday for the first time in a week to 718.82 metric tons, the least since September 2008.

Declines in oil “would be a headwind for gold since deflationary pressures would persist,” Carsten Fritsch, an analyst at Commerzbank AG, said by e-mail. Investors often use the metal as a hedge against rising consumer prices.

Gold, Oil

Oil fell to levels not seen in four years today on speculation that OPEC will refrain from cutting output as ministers meet in Vienna today. Venezuela will propose an output cut that’s backed by Ecuador, said Rafael Ramirez, the nation’s OPEC representative.

Bullion for immediate delivery was little changed at $1,195.73 an ounce. Gold for February delivery slid 0.2 percent to $1,195 an ounce in electronic trading on the Comex in New York. U.S. markets are closed today for Thanksgiving.

Switzerland will vote Nov. 30 on a proposal that would require the central bank to hold at least 20 percent of its assets in gold, to be stored in the country, and never sell any. Polls last week showed a plurality of voters oppose the initiative, though a portion of them were undecided.

Although the probability of ‘yes’ is low, said Mark To, head of research at Wing Fung Financial Group, a Hong Kong-based trader and refiner, “when this supportive factor is removed, precious metals will be pressured lower.’

Silver for immediate delivery retreated 1.1 percent to $16.334 an ounce. Palladium was little changed at $804.75 an ounce.

©2014 Bloomberg News

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