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Platinum falls 3 pct, investors reap profits
Wed 20 Feb 2008, 6:24 GMT
[-] Text [+] By Lewa Pardomuan
SINGAPORE (Reuters) - Platinum tumbled 3 percent on Wednesday, led by selling in Japan ahead of new margin rules in Tokyo, and as investors booked profits after pushing up the price to a 14th straight record high the previous day.
Spot platinum hit a low of $2,075 an ounce, down from $2,140/2,150 late in New York on Tuesday, when it rallied to $2,160 on speculative buying driven by fears of tight supplies after power shortages disrupted mining in South Africa.
Sister metal palladium briefly hit a 6-1/2-year high, while gold surrendered early gains as crude oil slipped after hitting a record high above $100 a barrel on Tuesday.
"People are nervous because platinum prices have risen too rapidly," said Yukuji Sonoda, precious metals analyst at Daiichi Commodities in Tokyo.
"This is only temporary. The South African problem is quite unchanged. It tends to get worse day by day," said Sonoda, who pegged support at $2,000 an ounce.
Platinum has gained more than 30 percent in 2008 after mines in South Africa, which account for four-fifths of the world's supply, ground to a halt for five days at the height of last month's power crisis.
The benchmark contract for December 2008 delivery on the Tokyo Commodity Exchange tumbled 165 yen per gram to 9,675 yen. It hit a new record of 7,207 yen before tumbling to a low of 6,901 yen.
TOCOM will raise margins by 50,000 yen per contract for all new positions and existing positions for all six platinum futures contracts from Thursday until the end of the month to cope with rising volatility.
"The market has been surging and psychological pressure was already growing as platinum has been overbought. TOCOM's margin increase from tomorrow became a good reason to prompt corrective sales in Tokyo," Shuji Sugata, manager at Mitsubishi Corp Futures and Securities Ltd, said.
"But we have to remember that fundamentals stay unchanged with the situation in South Africa unclear, so there will be plenty of buyers willing to buy on dips," Sugata said.
Last week, South African electricity utility Eskom invited tenders for power generating plants that can be operating by June 2012 as the company struggled to deal with chronic power shortages which have crippled the country's mining sector.
Palladium hit a bid high of $495 an ounce but then dropped to $479/484 an ounce, down from $491.00/494.00 late in New York.
Gold fell to $924.20/925.00 an ounce from $927.00/927.80 an ounce late in New York. Silver edged up to $17.43/17.48 an ounce from $17.36/17.41 an ounce.
Oil eased on Wednesday after surging nearly 5 percent to a record above $100 a barrel a day ago amid an influx of fresh investor capital into the commodities sector and concerns that OPEC will not hike output next month. Precious metals prices at 0531 GMT Metal Last Change Pct chg YTD pct chg Turnover Spot Gold 924.20 -3.40 -0.37 10.99 Spot Silver 17.45 -0.07 -0.40 18.14 Spot Platinum 2090.00 -50.00 -2.34 37.50 Spot Palladium 479.00 -12.00 -2.44 30.16 TOCOM Gold 3226.00 46.00 +1.45 5.42 80868 TOCOM Platinum 6977.00 -163.00 -2.28 30.68 56973 TOCOM Silver 609.50 7.70 +1.28 12.66 1764 TOCOM Palladium 1700.00 14.00 +0.83 25.83 20000 Euro/Dollar 1.4708 Dollar/Yen 107.84 TOCOM prices in yen per gram, except TOCOM silver which is priced in yen per 10 grams. Spot prices in $ per ounce.
