Platinum extends gains as strike drags on
Singapore (June 10) Platinum extended its winning streak to a fifth consecutive session on Tuesday as talks to resolve a five-month long strike in South Africa were deadlocked.
Palladium was near its highest in nearly three years, while trading in gold was muted as global equities were near record highs. Wage talks between the Association of Mineworkers and Construction Union and major platinum producers were deadlocked on Monday, prompting Mineral Resources Minister Ngoako Ramatlhodi to abandon his mediation role and dashing hopes for an end to a strike that is pushing the economy towards recession.
"There still appears to be a wide gulf between the two sides and from recent development it does not seem there will be a resolution soon," HSBC analysts said in a note.
Stocks on hand have helped to cover lost platinum output and there has been some talk that recycling has added to supply, but the analysts said the work stoppage could continue to support prices even after the dispute was settled.
"We see the strike as gradually eroding stocks and reducing the supply base significantly this year," they said.
Platinum rose 0.4% to $1,449.60/oz by 2.38am GMT, after earlier hitting $1,454.75, its highest since May 30. It has gained 1.5% over the previous four sessions.
Palladium also gained to trade near $844 — its highest since August 2011.
The five-month strike has halted mines that normally account for about 40% of global platinum output.
Meanwhile, gold was trading flat at $1,254.14/oz as its investment-hedge appeal was dented by stronger stock markets.
Asian stocks edged up to a three-year high on Tuesday after a record-breaking Wall Street bull run continued on fresh optimism over global economies, while rising yields supported the dollar.
Monthly data from asset manager BlackRock on Monday reflected market sentiment. About $297m was withdrawn from gold exchange-traded products in May as some of the heat came out of the Ukraine crisis, BlackRock said. Physical demand in Asia was subdued as prices stabilised and was not strong enough to push prices higher.
Source: BDlive.za
