Platinum, Palladium Futures Surge on Evidence Inflation Rising By Dave McCombs
Aug. 20 (Bloomberg) -- Platinum futures in Tokyo rallied and palladium had its biggest gain in two weeks, following advances in oil and other commodities, on expectations rising inflation will drive up investor demand for precious metals as a hedge.
Palladium for June delivery in Tokyo rallied 4.6 percent to close at 1,016 yen a gram ($287 an ounce), the biggest gain since Aug. 6.
Platinum futures rebounded from yesterday's one-year low after the U.S. Labor Department reported a 9.8 percent surge in July producer prices, the biggest advance since 1981.
``The fundamentals are now swinging back toward more favorable conditions for commodities,'' Jonathan Barratt, managing director of Commodity Broking Services in Sydney, said today by phone. ``The figures out in the U.S. yesterday show you've still got to look for inflationary concerns and so people will continue to buy gold and platinum.''
June-delivery platinum jumped 3.8 percent to close at 4,758 yen a gram ($1,343 an ounce) on the Tokyo Commodity Exchange. The most-traded contract yesterday dropped to 4,555 yen a gram, the lowest since Aug. 29, 2007.
Oil rebounded as the dollar fell against the euro from its highest since Feb. 20 and on forecasts a government report today will show a fourth weekly decline in U.S. gasoline stockpiles.
Soaring energy prices, including the jump in crude to a record last month, have fueled surges in consumer prices and demand for precious metals, which some investors buy as a store of value against inflation and weakening dollar.
Federal Reserve Bank of Richmond President Jeffrey Lacker yesterday said higher interest rates may be needed to bring down inflation even before growth and financial markets return to normal.
Platinum for immediate-delivery fell $7 to $1,352.50 an ounce at 6:13 p.m. in Tokyo, a 0.5 percent decline from yesterday in New York. The metal is down 41 percent from the record $2,301.50 set on March 4.
Crude oil for September delivery rose as much as 83 cents, or 0.7 percent, to $115.36 a barrel on the New York Mercantile Exchange and was at $114.68 at 6:16 p.m. Tokyo time.
To contact the reporter for this story: Dave McCombs in Tokyo at email@example.com
Last Updated: August 20, 2008 05:40 EDT
I was looking to buy 30 one ounce Maples today.....couldn't find a one at my usual dealers. Gon-naddler on Kitco had some BS diatribe going today about lack of demand...yada...yada....yada. The gov't and hedge funds are F-ing with the market. When this thing blows, it's going to be a space shot.
You sound like Tellie's twin brother or Tellie himself. Have you ever heard of supply/demand theory. When there is a strong demand and the limited supply, the price will go up not down. The price of Pd was (is) in the free fall indicating that there huge supply and the limited demand.