Platinum fell to a six-year low and palladium reached the lowest level since 2012 on speculation that supplies are ample amid slowing demand from China. Gold was little changed.
BMW AG has cut production this year by 16,000 cars in China and may revise profitability goals amid slowing sales, the Munich-based manufacturer said Tuesday. The country accounts for at least 23 percent of global demand for platinum and palladium, which are mainly used in catalytic converters that curb harmful auto emissions, Johnson Matthey Plc estimates.
Commodities have slumped as China’s economy expands at the slowest pace in 25 years, leading to gluts in metals, crops and energy. Platinum mine output is rebounding in top producer South Africa after a five-month strike last year. Faith in precious metals has soured as the Federal Reserve prepares to tighten monetary policy, curbing the appeal of investments that don’t pay interest.
“PGMs broadly speaking are reacting to weak global auto production and sales levels; China and emerging markets haven’t been great, and that means auto-catalyst demand is going to suffer,” Bart Melek, the head of commodity strategy at TD Securities in Toronto, said in a telephone interview. “Let’s face it, the environment isn’t necessarily precious-metals friendly of late.”
Platinum for October delivery lost 0.9 percent to settle at $958.50 an ounce at 1:09 p.m. on the New York Mercantile Exchange, after touching $945.40, the lowest since January 2009.
Palladium futures for September delivery dropped 0.8 percent to $598.60 an ounce, after falling to $586.55 an ounce, the lowest since August 2012.
Gold futures for December delivery increased 0.1 percent to $1,090.70 an ounce on the Comex in New York.
Investors bought bullion through exchange-traded products for the first time since mid-July, increasing holdings by 0.2 metric ton to 1,523.6 tons, data compiled by Bloomberg show.
Silver futures for September delivery gained 0.3 percent to $14.557 an ounce.