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NY Precious Metals Review:platinum, Palladium Extend Fri Rally
Jul. 17-MAR--
[B] NY Precious Metals Review:Platinum, palladium extend Fri rally
By Melanie Lovatt, BridgeNews
New York--July 17--NYMEX platinum and palladium futures extended last
week's rally, climbing throughout the day to finish at sharply higher
prices. While part of the rally was fueled by speculators jabbing around
in thin market conditions, the overriding impetus for the climb remains
strong physical demand coupled with concern over supplies from Russia.
* * *
October platinum ended up $15.80 or 2.8% at $574.50 per ounce, which is
a contract high and its highest level in two weeks on continuation charts.
It is also just short of the $574.90, or 11-year high, that platinum made
at the end of June. September palladium settled up $21.60 or 3.2% at
$708.25 per ounce after jumping to a 4-month high of $710.
Traders said that locals and funds pushed up platinum and palladium,
with the upside extended amid thin volume conditions. "There was demand on
the London fixes and nobody waiting to sell the stuff," commented one
trader.
While futures trade may be thin, platinum and palladium are
nevertheless continuing to see good consumer-driven physical demand,
agreed traders and analysts. "People are having a hard time finding
product and when they find it, they pay up for it, which is keeping the
spot market supported and driving the futures market," said David Meger,
senior metals analyst at Alaron Trading.
Some traders noted that there had been some considerable interest
overnight out of Japan, pointing out that Russia's mining giant, Norilsk,
had not yet made good on a statement a couple of weeks ago that it would
soon deliver platinum.
"It ran up overnight in the Far East and I don't believe Russia will
make deliveries," said Leonard Kaplan, president at Prospector Asset
Management. One traded agreed, pointing out that the "withholding of
supply" is continuing to plague the market, as it has done over the past
couple of years. He noted that platinum consumers had returned some leases
and bought back some metal, helping to extend the rallies.
However, lease rates slipped with platinum 1-month seeing 25-30%, down
10% from last week's levels. Some traders also pointed out that bids on
1-month platinum lease rates were even lower than 25%. Probably
contributing to softer lease rates was the incursion of some Russian
platinum into the market about 1 1/2 weeks ago. While it temporarily
appeared to dent prices, it was "swallowed up by a hungry market,"
commented one trader.
Estimates on how much Russian platinum was delivered range from 200,000
to 500,000 ounces, although players seem uncertain as to where the metal
came from.
Most suggested that it was not the metal earmarked for Japan. "I think
it's mostly spot stuff that hit the fix or was sold over-the-counter,"
said one trader. Others suggested it was material from Zurich that had
already appeared in import statistics.
In TheBullionDesk.com's weekly report, Ross Norman noted that while
some clarification is needed on the Russia situation, "the main point
remains, the market is operating very much hand to mouth and the supply
chain is non too reliable."
He said that assuming that Johnson Matthey are correct in their belief
that Russia sold 540,000 ounces of platinum in the first quarter of last
year, it is likely that the remaining stockpile in Russia is 160,000 to
360,000 ounces.
While most players agreed that demand for both platinum and palladium
remains strong, they said that the moves up are being exacerbated by
speculative buying. Some traders are questioning how long such strong
prices can continue, with one noting that palladium was already looking "a
bit toppy" and seeing a pullback in consumer interest at Monday's $710
high.
Alaron's Meger sees platinum staying well-entrenched within its recent
range of $530-570, with $580 representing resistance. However, in the
immediate term he sees it taking out the 11-year high it made two weeks
ago.
Meanwhile, August gold settled up $2.30 at $284.20 after reaching a
5-day high of $284.80. It climbed on short-covering after last week's dip
to a 1 1/2 month low following bearish U.K. gold auction results. Silver
remained a slave to the rest of the complex, following the other precious
metals higher, but without much enthusiasm. September settled up 1.5 cents
at $5.065 per ounce after scraping its way to $5.09, its highest
level in just over two weeks.
SETTLEMENT PRICES
--Aug gold (GCQ0) at $284.2, up $2.3; RANGE: $281.7-284.8
--Sep silver (SIU0) at $5.065, up 1.5c; RANGE: $5.055-5.09
--Oct platinum (PLV0) at $573.5, up $14.8; RANGE: $561-574.5
--Sep palladium (PAU0) at $708.25, up $21.6; RANGE: $689.9-710
SPOT PRECIOUS METALS PRICES:
New York 1520 ET London 1155 BST Tokyo 0630 GMT
Gold(KRCGL) 283.20-283.90 282.00-283.00 282.00-282.50
Silver(KRCSL) 4.99-5.03 4.98-5.02 4.98-5.00
Platinum(KRCPL) 570.00-578.00 575.00-583.00 570.00-577.00
Palladium(KRCPA) 695.00-710.00 695.00-705.00 680.00-690.00 End
Copyright 2000 Bridge Information Systems Inc. All rights reserved.
The Bridge ID for this story is 02333
(c) Copyright 2000 FWN
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