SUF.t,...Russians want the Pd price higher,...
8/9/2001 7:20:00 AM
LONDON, Aug 9 (Reuters) - Platinum prices plunged again in morning trade on Wednesday to fix at a 19-month low of $433.00 an ounce but traders said good fundamentals might help platinum halt its decline.
Traders welcomed a statement by a senior official from Russia's Norilsk Nickel (NKEL) -- the world's largest palladium producer -- who said the company will cut spot sales to boost the low price of palladium.
The move, when effective, would induce a positive sentiment in the market, traders said.
"Psychologically, in the market, such a move will certainly have a firming effect on prices. I can hardly wait to see Norilsk cutting down its spot sales," a trader said.
"Given that more than half of the palladium exported by Norilsk is sold on the spot market, the decision to cut sales could possibly remove anywhere between 300,000 and 600,000 ounces from the market over the remainder of the year," another trader said.
Norilsk's annual output is estimated at 2.8 million ounces.
Both platinum and palladium extended losses overnight on the Tokyo Commodity Exchange (TOCOM), for the second time in a row, on the back of a dearth of physical demand and concerns about the global economic outlook.
By 1119 spot platinum was indicated at $431.00/436.00 a troy ounce, down from Wednesday's New York close of $440.00/445.00.
Palladium was indicated at $440.00/450.00, up on last New York quote of $437.00/447.00.
"Short term moves in the PGM prices are as hard as ever to predict," John Reade, an analyst at UBS Warburg, said in report.
"However, we remain convinced that once this speculative-based selling in platinum abates, the fundamentals behind the platinum market will be reasserted and that both metals will rally through the second half of 20001," Reade said.
Traders said that prices went down in a flurry of selling by Japan's small investors who put their savings in platinum to hedge against the yen's decline.
"The net (Japan's) general public is now square...In the London fixing this morning both metals fixed quickly with very little interest seen (buying or selling) at fixes," Reade said.
The platinum market had been expected to rally following sharp losses since early this week, but speculators had been kept at bay by very thin demand, traders said.
Another analyst said news that Norilsk might scale down its spot sales of palladium would also have a positive impact on platinum prices, too.
"Investors have gone out of their positions now. I can't really see platinum breaking through $400. If Norilsk withdraws dramatically its spot sales, palladium firms and platinum should also react. We will see higher prices," he said.
Six months ago palladium traded at some $1,000 an ounce while platinum was at around $600.
Meanwhile, gold traded quietly, locked in its $265/270 range, and continued to take its cue from the foreign exchange markets.
Gold started the day on a more positive note after the U.S. dollar weakened in the aftermath of the poor picture painted for the U.S. economy by a Federal Reserve report on Wednesday.
"If gold makes it through current levels, we could see it test resistance at $271.50," one said.
By 1119 GMT, spot gold was indicatd at $269.20/269.70, up on its last close in New York at $268.10/268.60.
Silver was quoted at $4.16/4.18, flat on its last close in New York.
REUTERS |
