PRECIOUS-Platinum hits 6-week high on Lonmin strike; gold firm

Mon Aug 20, 2012 7:11am GMT
 

* Gold-platinum spread narrows as platinum prices rally
    * Spot platinum hits $1,477.50/oz, highest since July 5
    * Platinum group metals demand outlook still sluggish
    * Gold treads water, awaiting c.bank policy signal


    By Rujun Shen
    SINGAPORE, Aug 20 (Reuters) - Platinum rose to its highest
in more than six weeks on Monday as supply worries lingered
after violence at a major mine in South Africa, the world's top
platinum producing country, while gold firmed a touch.
    Forty-four people have been killed over the past week in the
conflict at the Marikana mine run by Lonmin, the world's
No.3 platinum producer. Striking workers could be dismissed if
they do not return to work on Monday. 
    Spot platinum hit $1,477.50 an ounce, its highest
since early July, before easing to $1,475.01 an ounce by 0651
GMT, after rallying more than 5 percent last week, fuelled by
worries that the violence would disrupt supply from South
Africa. 
    The gold-platinum premium dropped to below $150 an ounce,
its lowest since early July, after hitting a record above $230
just last week as grim economic prospects weighed on platinum
while gold was supported by hopes for more monetary stimulus
from central banks around the world.
    "If things in South Africa calm down, we may see the
gold-platinum spread widen again, because the demand for
platinum group metals is not good," said Peter Fung, head of
dealing at Wing Fung Precious Metals in Hong Kong.
    As the gold-platinum spread has shrunk to a multi-week low,
some investors may start to reverse their recent trading
strategy of buying platinum and selling gold, he added.
    
    
    GOLD AWAITS POLICY CLARITY
    Spot gold gained 0.2 percent to $1,619.26 an ounce.
The U.S. gold futures contract for December delivery was
up 0.1 percent at $1,621.70.
    Gold investors are still waiting for clear signals from
central banks on what they plan to do to shore up their fragile
economies. 
    U.S. consumer sentiment improved in early August to the
highest in three months, adding to the argument that the U.S.
Federal Reserve may not need to launch another round of bond
purchases any time soon as the economy has shown signs of
stabilisation. 
    Hedge funds and money managers cut their net long position
in U.S. gold futures and options for a second consecutive week,
as investors reduced their bullish bets because of doubts over
more monetary stimulus by the Fed. 
    But holdings of the SPDR Gold Trust, the world's
largest gold-backed exchange-traded fund, rose 0.9 percent to
1,274.739 tonnes by Aug. 17, the highest since July 9.
 

   Precious metals prices 0651 GMT
  Metal             Last    Change  Pct chg  YTD pct chg    Volume
  Spot Gold        1619.26    3.67   +0.23      3.55
  Spot Silver        28.22    0.19   +0.68      1.91
  Spot Platinum    1475.01   10.51   +0.72      5.89
  Spot Palladium    602.64    0.34   +0.06     -7.64
  COMEX GOLD DEC2  1621.70    2.30   +0.14      3.50         6785
  COMEX SILVER SEP2  28.17    0.16   +0.58      0.90         1641
  Euro/Dollar       1.2359
  Dollar/Yen         79.47
  COMEX gold and silver contracts show the most active months

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