Investor holdings in platinum- and palladium-backed funds are at or near records as demand from automakers and a South African mining strike that lasted five months leads to a third successive supply deficit. U.S. auto sales adjusting for seasonal trends accelerated to an annualized pace of 16.98 million in June, the fastest in almost eight years, researcher Autodata Corp. said yesterday.
About 220,000 members of the National Union of Metalworkers of South Africa stopped work yesterday to support their request for pay increases. The protests come after a platinum strike that lasted from January to June. The country is the largest producer of the metal, which is mainly used alongside palladium in car pollution-control devices.
“Investors acknowledge the difficulties that the South African platinum sector faces beyond the resolution,” UBS AG analysts wrote in a report today. “Participants will be keeping an eye out for any signs of tightness in the months ahead.”
Platinum for October delivery added 0.1 percent to $1,516.70 an ounce by 7:38 a.m. on the New York Mercantile Exchange. It reached $1,523, the highest since Sept. 4. The metal for immediate delivery rose 0.2 percent to $1,512.51 in London.
Futures trading volume was 77 percent above the average for the past 100 days for this time of day, according to data compiled by Bloomberg. Palladium for September delivery rose 0.1 percent to $855.55 an ounce in New York. It’s up for a eighth straight session in the longest run of gains since 2012.
Holdings in platinum-backed exchange-traded products reached a record 88 metric tons on June 20 and were little changed from that level as of yesterday, data compiled by Bloomberg show. Palladium holdings are at an all-time high. Gold ETP assets rose 13.2 tons in the past two days, the biggest two- day tonnage increase since 2012.
The dollar was little changed near a seven-week low against a basket of 10 major currencies before Federal Reserve Chair Janet Yellen speaks today and after a gauge of U.S. manufacturing yesterday rose less than analysts projected. Gold has risen 10 percent this year, rebounding from the biggest annual slump in three decades, as the Fed said it will keep interest rates at almost zero for a considerable time and as unrest in Iraq and Ukraine spurred haven demand.
“With continued dollar weakness and various ongoing problems around the world, the precious metals seem to be attracting some fresh attention,” David Govett, the head of precious metals at Marex Spectron Group in London, wrote today in a report. “We are seeing investors getting in near the highs. I would expect to see some profit-taking over the next day or two.”
Gold for August delivery added 0.1 percent to $1,327.70 an ounce on the Comex in New York. It reached $1,334.90 yesterday, the highest since March 24. Bullion’s 14-day relative-strength index was at 72.5, above the level of 70 that suggests to some traders who study technical charts that prices may retreat.
Silver for September delivery retreated 0.1 percent to $21.105 an ounce. It reached the highest since March yesterday.
The U.K. Treasury Select Committee meets today at 2:45 p.m. local time on the manipulation of benchmarks. The World Gold Council last month called for a meeting on July 7 for the industry to discuss changes to the century-old London gold fixing.
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