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)  -

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.

MINEWEB is an interactive publication, with rolling deadlines through each day, commencing in the Sydney morning,  and concluding, 24 hours later,  in the Vancouver evening.  If you believe your side of an issue deserves inclusion, but has failed to meet one of our deadlines, you are invited to notify the Editor in Chief in Johannesburg, and we will include you in our editing and expanding on our stories. Email him at alechogg@gmail.com

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South Africa’s gold output fell by 32.2% in November

Data released by Statistics South Africa shows that gold output fell by 32.2% in volume terms in November 2012, highlighting the impact of illegal strikes.

Author: Reuters
Posted: Tuesday , 15 Jan 2013

JOHANNESBURG (Reuters) -

South Africa‘s gold output fell by 32.2% in volume terms in November, highlighting the impact of illegal strikes, while total mineral production rose 1.1% compared with the same month last year, data showed on Tuesday.

Production of non-gold minerals was 4.5% lower, Statistics South Africa said. Production of platinum group metals climbed 3% in November.

MINEWEB is an interactive publication, with rolling deadlines through each day, commencing in the Sydney morning,  and concluding, 24 hours later,  in the Vancouver evening.  If you believe your side of an issue deserves inclusion, but has failed to meet one of our deadlines, you are invited to notify the Editor in Chief in Johannesburg, and we will include you in our editing and expanding on our stories. Email him at alechogg@gmail.com

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In global reserve currency transition gold may move to center stage-OMFIF

If financial collapse continues to haunt the dollar and the euro, as China’s renminbi needs time to hit its stride, the world may rush into the safe haven of gold, says a new report.

Author: Dorothy Kosich
Posted: Tuesday , 15 Jan 2013

RENO (MINEWEB) -

A report by the Official Monetary and Financial Institutions Forum (OMFIF) suggests that demand for gold will increase as central banks of emerging market economies become increasingly interested in gold in the transition from one global reserve currency system to a greater number of other currencies.

In an international monetary system where the U.S. dollar is considered the only real reserve currency, the role of gold has been limited. However, the OMFIF report suggests, “The role of gold is likely to be bigger in the transition period to a multiple reserve currency system than when system is in existence.”

The report, which was commissioned by the World Gold Council, suggests central banks will trade gold more actively. Nonetheless, the OMFIF stressed repeatedly that “gold will not replace fiat currencies” and that “the Gold Standard will not return.”

The newspaper China Daily recently observed that China has almost doubled its gold reserves in the past five years and is now the sixth largest holder of monetary gold. China also holds the world’s largest forex reserves, which were worth more than US$3.31 trillion at the end of last year.

“Driven by China’s desire to increase its financial clout, the Chinese renminbi is likely to emerge gradually as a genuine international currency as the country has been easing restrictions on its use in transactions and investments abroad,” China Daily suggested.

Nevertheless, as China weighs its options for joining the dollar and the euro in the reserve asset game, “gold—the official asset that plays no formal part in the monetary system yet has never really gone away—is poised, once again, to play a pivotal role,” said OMFIF Advisory Board Chairman Meghnad Desai.

In his forward to the report, “Gold, the renminbi and the multi-currency reserve system,” Desai suggested, “If the spectre of collapse continues to haunt the main reserve assets, and on the expectation that the renminbi will take time to get into its stride, the world will rush to safe havens. Gold may be the only one with the requisite size, clout and—dare I say it—history to help ward off the strains that will beset the world monetary system.”

“It would be wise to draw up contingency plans for such eventualities,” he advised.

“Many dismiss gold as a relic of the past or as an inadequate hedge against inflation,” he noted. “But from an asset management point of view, as well as a basis of political analysis, gold has a lot going for it; it correlates negatively with the greenback, and no other reserve asset seems safe from the coming dollar shock.”

The report advises the concentration of gold’s ownership will move gradually from the central banks of the industrialized west towards the emerging market economies, especially in Asia. For instance, if Germany’s Bundesbank considered rebalancing its gold reserves through selling gold directly to the People’s Bank of China, the OMFIF suggests it would have “widespread repercussions.”

Desai observed, “The Chinese authorities’ own evident leaning towards building up stocks of monetary gold, reflecting a cultural attachment to precious metals that goes back millennia, is itself a powerful factor in the equation.”

Large Chinese banks, which are building vault space to accommodate private sector gold activities, “will increasingly offer storage facilities to central banks form developed and emerging market economies to offset the west’s traditional dominance in this field,” the report forecasts. “Issues of convenience, reliability and cost will generate greater interest in central banks holding gold away from the traditional centres, mainly the Federal Reserve Bank of New York and the Bank of England.”

Desai favors extending the IMF’s Special Drawing Right (SDR) to include the R-currencies—the renminbi, rupee, real, rand and ruble—with the addition of gold. “By moving counter-cyclically to the dollar, gold could improve the stabilizing properties of the SDR. Particularly if the threats to the dollar and the euro worsen, a large SDR issue improved by some gold content and the R-currencies may be urgently required.

A veteran mining journalist, Dorothy Kosich, MA, MPA, brings a wealth of experience not only in mining itself but also in public policy, government affairs and socially sustainable development to bear on Mineweb’s largest market. She is Mineweb’s Deputy Editor and Americas’ Editor

Email: dorothy@mineweb.com

MINEWEB is an interactive publication, with rolling deadlines through each day, commencing in the Sydney morning,  and concluding, 24 hours later,  in the Vancouver evening.  If you believe your side of an issue deserves inclusion, but has failed to meet one of our deadlines, you are invited to notify the Editor in Chief in Johannesburg, and we will include you in our editing and expanding on our stories. Email him at alechogg@gmail.com

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