Gold Trades Little Changed as Platinum Sags to 6-Year Low

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The platinum market is the latest victim in the Greece debt turmoil.

Prices tumbled to a six-year low on Monday. The white metal is mainly used in pollution-control devices for cars, and Europe accounts for about a quarter of global demand. With talks on securing a bailout deal for Greece in deadlock, it’s increasing concern that auto demand in the region will drop.

Platinum has slumped 10 percent this year, the biggest loss among the major precious metals. Investors cut holdings in exchange-traded funds backed by the metal in three of the past four weeks. Vehicle sales in Europe declined 24 percent in April, the third decline in 2015, the latest figures show.

Greece is posing a “threat to the rest of Europe, which is impacting the demand side of the equation” for platinum, Mike Dragosits, a senior commodity strategist at TD Securities in Toronto, said in a telephone interview. “Judging by reporting from some of the major European countries like Germany, the U.K. and France, you can amalgamate that auto sales will be down in the aggregate in May.”

On the New York Mercantile Exchange, platinum futures for July delivery declined 0.7 percent to settle at $1,088.60 an ounce at 1:12 p.m., after touching $1,077.20, the lowest since May 2009.

Platinum is trading at the cheapest in more than two years relative to gold. The ratio between the metals in the spot market dropped on Monday to about 0.91, the lowest since December 2012.

Platinum’s Struggle

“Platinum has struggled due to a persistently weak gold price, modest fundamental shifts in its demand profile as well as substantial long-platinum, short-gold relative-value trades, some of which capitulated today,” Tai Wong, the director of commodity products trading at BMO Capital Markets Corp. in New York, said in a telephone interview.

The white metal’s use in automotive catalytic converters accounts for more than 50 percent of demand, according to Johnson Matthey Plc. Gold is held mainly by investors and used in jewelry, with industrial consumption limited to about 10 percent of demand.

Gold futures for August delivery climbed 0.6 percent to $1,185.80 an ounce on the Comex in New York, gaining for the first time in three sessions.

Silver futures for July delivery climbed 1.6 percent to $16.083 an ounce on the Comex.

Palladium futures for July delivery slid 0.5 percent to $734.15 an ounce on the Nymex.

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