Platinum prices jump to three-month highs

Prices soared on Monday, hitting three-month highs and closing in on parity with gold after a supply squeeze in the metal critical to automakers.

Author: Barani Krishnan
Posted: Tuesday , 15 Jan 2013

NEW YORK (Reuters)  -

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Platinum prices jumped on Monday, hitting three-month highs and closing in on parity with gold after a supply squeeze in the metal critical to automakers, while corn was set for its longest rally since June on sharply lower U.S. stockpile forecasts.

Commodities also got a boost as the dollar tumbled against the euro, attracting buyers using the single European currency.

Oil and gold edged higher and arabica coffee briefly hit two-month peaks as the euro surged to an 11-month high against the dollar on bets that the European Central Bank would be less likely to undertake monetary easing.

The Thomson Reuters-Jeffries CRB index settled higher for a third straight session, gaining nearly half a percent, after 10 of the 19 markets on the commodities bellwether ended up. Soybeans and silver rose more than 2 percent each while corn, wheat, heating oil and natural gas all rose about 2 percent.

PLATINUM SOARS ON SUPPLY SQUEEZE

Platinum rose to its highest levels since October on the prospect of further supply outages.

News that South Africa’s Anglo American Platinum is likely to sell or shut its Union mine as part of a review of its platinum business by parent Anglo American triggered strong buying by commodity funds.

Spot platinum was up 1.5 percent at $1,652.50 an ounce by 2:45 p.m. EST (1945 GMT), having touched a three-month high at $1,660 an ounce.

That brought the price of platinum, used to remove toxins from auto fumes, almost with parity to gold prices. The spot price of gold was at above $1,668 an ounce, up 0.4 percent, after a session peak at $1,674.40.

“Platinum prices definitely have room to move higher,” said Howard Wen, metals analyst at HSBC.

Platinum’s discount to gold narrowed to around $10 from about $140 at the start of the year.

Analysts expect the review at Amplats, the world’s top platinum producer, will lead to at least some shaft closures due to soaring costs and falling profits.

HIGHEST GRAIN PRICES IN 3 WEEKS

U.S. grains notched their highest prices in three weeks, with corn set for its longest rally since June after a government report last week forecast stockpiles in the world’s top producer to hit a 17-year low by summer’s end.

Soybean futures jumped more than 3 percent, on pace for the biggest daily bounce since August on a rebound from last week’s six-month low. The rebound followed the announcement of No.1 soy importer China’s fourth large purchase of U.S. soybeans in two weeks.

Corn marked a sixth straight session of gains – the longest streak of higher prices since the first days of the June rally that stirred futures to a record peak in August. March futures for the grain traded in Chicago finished up 2.2 percent, or 15-1/4 cents, at $7.24 per bushel.

March soybeans ended up 3.3 percent, or 44-3/4 cents, at $14.18 per bushel, setting the largest daily increase since Aug. 9.

COFFEE COOLS AFTER EARLY RALLY; OIL UP

Arabica coffee futures turned down slightly after jumping to a 2-1/2-month high, as the U.S. dollar pared earlier losses, and producers in South and Central America sold into the rally.

Arabicas extended the previous session’s rally but then turned down a shade as producer selling entered the market as the U.S. dollar gave back earlier losses, dealers said.

Arabica for March settled down 0.05 cent at $1.5330 per lb in New York, after touching a 2-1/2-month high at $1.5590.

In oil, London’s benchmark Brent crude closed up 1.1 percent, or $1.24, at $111.88 a barrel.

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