Mon Aug 20, 2012 1:17pm EDT
* Speculators bet on fall in S. Africa platinum output
* Charts show platinum near overbought territory
* Gold-platinum spread narrows after platinum rally
By Frank Tang
NEW YORK, Aug 20 (Reuters) – Platinum prices jumped nearly 2 percent on Monday, hitting a two-month high after deadly violence at a mine in top producer South Africa triggered heavy
speculative buying on supply worries.
Gold edged up 0.3 percent as inflow into the holdings of the world’s largest bullion-backed exchange-traded fund boosted
sentiment, and silver jumped 2 percent as platinum’s rally triggered short-covering.
Investors bought platinum on worries that mines in South Africa may produce less of the metal after 44 people were killed
during a strike at the Marikana mine owned by Lonmin , which accounts for 12 percent of global platinum output.
The metal soared 7 percent in the past three sessions, bringing its year-to-date gain to 7 percent, which means
platinum has outperformed gold, silver and copper so far in 2012.
 
On technical charts, platinum’s relative strength index is at 69.8, just a hair below 70 which is seen as overbought. “Markets that are overbought can very easily get a lot more
overbought before they go down,” said Adam Sarhan, CEO of Sarhan Capital.
Momentum buying should further underpin platinum after it climbed to a two-month high and on its outperformance in the
metals complex, Sarhan said. Spot platinum rose 1.8 percent to $1,491.49 an ounce, after hitting a high of $1,491.99 an ounce which marked its
highest since June 18.
Last week, platinum posted a 5 percent rally, its biggest weekly rise since February.
Speculative fervor in platinum futures was evident even as about a third of the workforce trickled back to work at Lonmin
on Monday. Analysts said the lost platinum production due to the work stoppage at Lonmin has been negligible so far.
Deutsche Bank said in a note that platinum market’s expected surplus for 2012 “could easily be wiped out” if labor violence
prolonged at Lonmin or if the unrest spread to other mines. Platinum’s climb also benefited sister metal palladium
, which rose to an eight-week high at $608.50 an ounce in early trade. It was up 0.2 percent at $603.60.
 
PLATINUM DISCOUNT NARROWS
Platinum’s rise narrowed its discount to gold to less than $130 an ounce from above $230 an ounce a week ago.
Platinum’s rally has lifted gold and silver, which have been recently trading in a range on speculation about whether the
Federal Reserve and the European Central Bank could launch more gold-friendly monetary stimulus.
Spot gold was down 0.3 percent at $1,620.99 an ounce by 12:33 p.m. EDT (1633 GMT).
U.S. December gold futures for December delivery climbed $4.30 an ounce to $1,623.70.
Silver gained 2.2 percent at $28.64 an ounce. Buying by central banks, a major support to bullion prices this year, was evident again last month, after Russia’s central
bank said on Monday that it added another 18.7 tonnes of gold to its reserves in July.
 
Prices at 12:33 p.m. EDT (1633 GMT)
LAST NET PCT YTD
CHG CHG CHG
US gold 1623.70 4.30 0.3% 3.6%
US silver 28.590 0.588 2.1% 2.4%
US platinum 1497.00 23.90 1.6% 7.0%
US palladium 606.80 1.70 0.3% -7.5%
 
Gold 1620.99 5.40 0.3% 3.7%
Silver 28.64 0.61 2.2% 3.5%
Platinum 1491.49 26.99 1.8% 7.1%
Palladium 603.60 1.30 0.2% -7.5%
 
Gold Fix 1615.00 -0.25 0.0% 2.6%
Silver Fix 28.10 -10.00 -0.4% -0.3%
Platinum Fix 1462.00 8.00 0.5% 5.9%
Palladium Fix 598.00 3.00 0.5% -6.0%
URL: http://www.reuters.com/article/2012/08/20/us-markets-precious-idUSBRE87501B20120820