Platinum Rises on Investment, Industrial Demand
Source: Bloomberg, Nicholas Larkin and Kim Kyoungwha (1/12/10)
"Platinum and palladium rose to the highest prices in at least 17 months. . ."
Platinum futures headed for the longest rally in more than two years after the introduction in the U.S. of exchange-traded funds linked to the metal and palladium. Futures also gained as data showed China replaced the U.S. as the world's largest auto market. Automakers account for about half of platinum use.
"If you have new ETFs offered in a region, it is positive," said Peter Fertig, owner of Quantitative Commodity Research Ltd. in Hainburg, Germany. Higher prices are also "related to figures from the car industry."
Platinum for April delivery rose as much as $35, or 2.2%, to $1,627.50 at 8:55 a.m. on the New York Mercantile Exchange's Comex unit, the highest price since August 2008. The metal, up for an eighth day in a row, was last at $1,598.70. Palladium for March delivery was up 0.2% at $432.85 an ounce after earlier reaching $448.85, the highest price in almost 18 months.
"Platinum group metals are a necessary component in construction of catalytic converters," said James Steel, an analyst at HSBC Securities. "The prospect of a continued recovery in global auto demand this year is positive for platinum group metal prices."
The ETFS Platinum Trust and ETFS Palladium Trust started trading on the NYSE Arca stock exchange on Jan. 8, Bloomberg data show. The funds are backed by physical metal, according to notices published on the Web site of ETF Securities Ltd.
Platinum will average $1,650 an ounce this year, 18% more than a previous estimate, Deutsche Bank AG said in a report dated yesterday. The bank also raised its palladium forecast 38% to $444 an ounce.