London Gold Fixes Easier, Platinum Buoyant

The platinum group metals (PGMs) led the way for the precious markets in Europe on Wednesday, but gold and silver were reluctant followers, dealers said.

There is no doubt that the PGMs are leading the way but we need some fresh story to get gold moving, a dealer said. Palladium fixed at a fresh eight-year high of $180.50, $0.75 above the highest price since April 14, 1989 set on Tuesday afternoon. Platinum at $396.00 fixed at its highest level since February 28, 1997.

Gold, by contrast, was largely unchanged in early business and fixed at $342.25 after $343.00 on Tuesday.

 

All the metals were bought early but gold and silver were offered off later and platinum came off its $398/$399 high, a dealer said.

Dealers said the market largely dismissed confirmation that Russia, the world's leading supplier of palladium and second biggest exporter of platinum, would begin 1997 shipments later this month or the beginning of June. Formal talks with Japanese importers would begin June 1, Russian officials also said.

When you're looking at a lease rate of 25 per cent for a month (palladium), nobody is going to sell on something which might happen in a couple of week's time, a dealer said.

Some sources saw platinum and palladium prices heading towards $400 and $200 respectively as tight supply and cripplingly high lease (borrowing) rates made it possibly more economic to take the price risk of buying rather than borrowing metal.

Palladium open interest reached a record level on Nymex (on May 19 at 12,182 lots) and with the price going up, that is textbook stuff for a bull market, a dealer said.

Basically the funds have all gone long. But if the price doesn't go up, it could be vulnerable, he said.