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Platinum price extends winning streak

Jan 16 2013 10:50 Reuters

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Singapore - Platinum reversed early losses on Wednesday to extend its winning streak into a seventh straight session, buoyed by rising supply concerns after staff at top producer Anglo Platinum [JSE:AGL] downed tools.

Workers in South Africa refused to go underground for overnight shifts to protest an announcement from the firm, known as Amplats that it would close mines and cut jobs.

"In the short term, platinum may see more strength, boosted by news from Amplats," said Alice Chiu, assistant manager of PGM trading at Heraeus Metals Hong Kong.

South African platinum production was hit last year by a wave of violent wildcat strikes.

"Platinum will perform better than gold this year because of improving economic outlook, but right now it may be a little overbought," Chiu said.

Spot platinum had inched up 0.1% to $1 680.50 an ounce by 07:32 GMT, headed for a seventh straight session of gains, its longest winning streak since early October. It rose to a three-month high of $1 699.5 the day before.

Spot palladium was up 0.3% at $710.50 an ounce, easing from Tuesday's intra-day high of $717.50, a level unseen since early March, 2012.       

Spot gold edged up 0.3% to $1 682.69 an ounce, on track for a third straight session of gains on expectations that the world's key central banks will continue their ultra-loose monetary policies.

US gold was little changed at $1 682.80.

The chart outlook for gold brightened after it broke a resistance level of $1 678 an ounce, which had pressured prices for the past week or so, and prices are expected to rise to $1 701 an ounce, said Reuters market analyst Wang Tao.

But gold's short-term strength could be capped by the lack of liquidity in the market, said Li Ning, an analyst at Shanghai CIFCO Futures.

"Technicals and fundamentals are both supportive of gold, but we are missing the flow of liquidity," she said, referring to a more than four-month low in net long positions in US gold futures and options.

"If we see investors pour more money into this market, it will help confirm the upward trend."

The benchmark gold futures contract on the Tokyo Commodity Exchange hit a record high of ¥4 828 a gram, extending its record-hitting rally into a third session.  

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anglo platinum  |  platinum  |  commodities  |  markets
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