Platinum Stalls as South African Strike Risk Wanes

London (July 9)  A rally in platinum prices stalled Wednesday as the latest threat of strike action in South Africa receded.
The mining industry in South Africa, the world's largest supplier of platinum, is trying to recover from a five-month- long strike that ended last month. That strike constricted global supply over the past five months, sending prices higher.

A wildcat strike at producer Impala Platinum Holdings Ltd. Monday sparked volatility. Platinum went from strong gains to scaled-back losses and profit-taking, while palladium prices climbed to their highest level for more than 13 years.

Prices news lost steam Wednesday as workers were expected to return to work.

Spot platinum was up just 0.3% on the day at $1,495.95 a troy ounce, while palladium fell 0.2% to $867.50 an ounce.

The metals, primarily used to make vehicle autocatalysts, continue to find underlying support from robust car sales, said analysts at Commerzbank in a note to clients.

The bank cited figures from the China Association of Automobile Manufacturers, showing that 1.56 million cars were sold in June.

"This brings total car sales in the first six months of the year to 9.63 million units, an 11.2% year-on-year increase," noted the bank. "If this trend continues in the second half of the year, more than 19 million cars will probably be sold in China, the highest-ever total in a single year."

Spot gold rose 0.2% to $1,322.79 a troy ounce, while silver climbed 0.3% to $21.086 an ounce, with markets waiting for the release of minutes from the U.S. Federal Open Market Committee's latest monetary policy meeting.

"If these were to contain any surprises, this could also have an impact on precious metal prices via the euro-dollar exchange rate," said Commerzbank's analysts.

Source: NASDAQ.com