Monday May 18, 4:06 pm Eastern Time
NY precious metals end lower led by palladium
NEW YORK, May 18 (Reuters) - New York precious metals markets ended broadly lower, with palladium staging a
stunning reversal Monday after hitting life-of-contract highs for the fourth time in five sessions.
The liquidation in palladium coincided with the New York Mercantile Exchange's announcement of increased margin
requirements for outright positions, effective at the close of business Monday, making the metal one of the most expensive to
trade.
NYMEX June palladium ended at $383.90 an ounce, down $13.60, trading a $377.20-$419.00 range.
June palladium higher moved to life-of-contract highs on the opening, following the fifth consecutive limit-up day on the Tokyo
Commodity Exchange. Spot palladium prices moved to all-time highs in the London bullion market, and at one point, was
trading at a premium to the platinum market for the first time ever.
''But when NYMEX announced their new margins, we started to see some profit-taking,'' said one commission house trader.
''The market is getting almost prohibitively expensive to trade. We're at unprecedented levels, so many people thought this
was a good opportunity to pull back and reload before riding the market higher.''
Outright margins on NYMEX palladium will be raised to $5,000 from $2,500 for clearing members, $5,500 from $2,750 for
members, and $6,750 from $3,375 for customers, effective at the close of business Monday.
Palladium prices have doubled since the year began against a backdrop of a lack of Russian exports, which have been stymied
by bureaucracy and changes in the government.
In a London press briefing, Johnson Matthey, marketing agent for Amplats, the world's largest platinum group metals
producer, predicted that demand for palladium would continue to grow substantially in 1998 led by demand for autocatalysts.
The company said prices would be well supported at $250 an ounce, not exactly a bold statement given that spot palladium
reached a high of $420 an ounce Monday.
COMEX July silver ended at $5.287 an ounce, down 28.5 cents from Friday's close, trading in a range between $5.280 and
$5.575 an ounce.
In the bullion market, spot silver was quoted at $5.28/31 an ounce, compared with the London fix, which was $5.42 an
ounce, and Friday's New York close, which was $5.57/60 an ounce.
''I didn't see anything fundamental behind the move in silver,'' said John Tyree, a trader with Fimat Futures. ''The move
occurred in very light volume. We hit some key technical level and down we went.''
Chartists noted stop-loss orders amassed at $5.37 an ounce in the July contract, which attracted some fund liquidation.
COMEX June gold finished down $1.70 at $300.20 an ounce, trading between $299.30 and $302.00 an ounce.
Spot gold was trading at $299.30/80 an ounce, compared with the late London fix, which was $300.30 an ounce, and
Friday's New York close, which was $301.00/50 an ounce.
NYMEX July platinum was trading at $383.90 an ounce, down $13.60 from the previous close. |
