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PRECIOUS-Platinum firm on South African strikes; gold eases below $1,300
May 20, 2014 / 3:47 AM / 4 years ago

PRECIOUS-Platinum firm on South African strikes; gold eases below $1,300

* Gold edges down below $1,300 an ounce
    * WGC report shows India, China demand in Q1 dropped
    * Indian demand could pick up in H2: WGC

 (Adds WGC demand report, updates prices)
    By A. Ananthalakshmi
    SINGAPORE, May 20 (Reuters) - Platinum was steady on
Tuesday, holding on to overnight gains as labour strikes in top
producer South Africa continued for a 17th week, disrupting
supply of about 40 percent of the metal's global output.
    Gold fell back slightly below $1,300 an ounce as an industry
report showed first-quarter demand in top buyers India and China
fell sharply, but there was little other major economic data.
    Spot gold eased 0.2 percent to $1,289.55 an ounce by
0651 GMT. Platinum was flat at $1,464.00 after rising 0.5
percent in the previous session. 
    Despite the recent price gains, platinum's performance
during the long strike has been uninspired. 
    "Considering how long the strike is dragging on, it is quite
remarkable that prices are not pushing higher still," INTL
FCStone analyst Edward Meir said. 
    "We attribute this to the fact that both platinum and
palladium demand remains steady, but not remarkable, while more
importantly, there apparently is plenty of idle inventory on
hand to accommodate the buying that does exist."
    South Africa's longest and costliest mining strike turned
violent this month, with four miners killed as more employees
tried to report for work at the world's top platinum producers,
ignoring calls by the union to continue protesting.
    The four-month-long strike against Anglo American Platinum
, Impala Platinum and Lonmin, could
cost 1 million ounces of production this year.
    While platinum finally broke upwards last week, reaching
levels not seen since early March, it is still only about $30 an
ounce higher than it was immediately before the strike.
    On gold, traders said though the metal has been steady in
recent trading sessions, it is likely to fall soon as the metal
has been trading in narrow ranges.
    "With prices currently closer to the 100-day moving average
rather than the 50-day moving average, a break below the $1,293
level may invite momentum sellers into the market and lead to
further price losses," HSBC analysts said in a note.
    Investors are watching for clear developments in Ukraine and
decisions by the European Central Bank regarding stimulus
policies for cues on price direction.
    In the physical markets, gold demand in major consumers
China and India fell in the first quarter from the previous
year's record levels, the World Gold Council said on Tuesday,
though a drop in sales from bullion-backed investment funds kept
overall demand steady. 
    India's gold demand is likely to pick up in the second half
of the year as curbs on bullion imports are expected to be eased
by the country's new government, the industry body said.

    PRICES AT 0651 GMT    
 Metal           Last     Change   Pct chg
 Spot gold       1289.55    -2.05    -0.16
 Spot silver       19.27    -0.05    -0.26
 Spot platinum      1464        0        0
 Spot palladium      812     -0.5    -0.06
 Comex gold       1289.9     -3.9     -0.3
 Comex silver     19.295   -0.058     -0.3
 Euro             1.3698                  
 DXY              80.071                  
 COMEX gold and silver contracts show the
 most active months
 (Reporting by A. Ananthalakshmi; Editing by Tom Hogue)

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