Platinum rebounds off lows, gold and silver
dull
12:12 p.m. Oct 30, 1998 Eastern
LONDON, Oct 30 (Reuters) - Platinum rallied from
near-13-year lows on Friday as renewed buying interest
countered London-based interbank selling that had
knocked $8.00 off spot prices, dealers said.
A move by the Group of Seven (G7) leading industrial
nations aimed at strengthening the global financial system
helped platinum lift from session lows at $329.00/$331.00
an ounce, one analyst said.
Platinum dropped to December 1985 levels when sales hit
the market just after the morning fix in London, recovering
in time for an afternoon fix at $334.25 versus the
morning's $336.00.
Spot platinum was last at $334.50/$336.50, $2.50 below
New York's close Thursday's close.
Demand for platinum, used mainly in jewellery and vehicle
emission reduction systems, has weakened amid the
economic slowdown in Japan in particular this year.
''A lot of selling came out after the fix. One of the banks
here in London started selling and down we went,'' said
one dealer.
''I guess it would be long liquidation, fund-related quite
possibly,'' he added.
Yen strength on Friday meant the low platinum prices
looked particularly attractive in the Japanese currency, a
likely source of buying interest through the day, one dealer
said.
Mitsui commodities analyst Andy Smith said the Group of
Seven initiative should boost sentiment towards silver,
platinum and other white metals, while undermining the
case for gold.
''People will want to believe that it's system stabilising
even if it isn't,'' he said.
''That should be negative for gold while, perversely, it's
good news for white metals and silver,'' Smith added.
''Whether it works or not is another question,'' he said of
the G7 plan, which included efforts to keep a tighter
check on destabilising flows of hot money and giving the
International Monetary Fund $90 billion in additional
firepower to help beleaguered economies.
London gold fixed at $292.30 in the afternoon versus the
morning's $293.10, with spot prices last down at
$292.70/$293.20, 70 cents off New York's previous
close.
An equity research report by brokers Salomon Smith
Barney predicted higher prices for gold and gold mining
stocks, particularly companies with high-quality,
undervalued assets.
''We expect that gold prices will breach the $300 per
ounce resistance level to average $350 in 1999, as fears
of central bank sales subside, short pressure eases and
industry fundamentals are reasserted,'' said its report
dated October 28.
Silver was last slightly lower at $5.06/$5.09, down a cent
on New York, while palladium last 50 cents up at
$274.50/$279.50.
((Patrick Chalmers, London Newsroom +44 171 542
8057. london.commodities.desk+reuters.com))
Copyright 1998 Reuters Limited. |
