- ‘Double trouble’ as demand concerns, dollar gains hit metal
- Prices of gold, silver also headed for weekly losses
Precious metals declined, with platinum heading for a seventh straight weekly loss, the longest run since 2013, and palladium set to record the worst slump since May.
Investors are losing interest as the popularity of electric cars, which use less platinum and palladium than gasoline-fueled vehicles, threatens demand for the metals used in auto pollution-control devices, according to John Meyer, an analyst at SP Angel Corporate Finance LLP. The strengthening dollar also weighed on prices.
“Demand is in question,” James Cordier, the founder of Optionsellers.com in Tampa, Florida, said in a telephone interview. “The dollar has been a weight on gold and precious metals, and without any industrial demand for platinum, that’s double trouble.”
Platinum for immediate delivery slid 1.8 percent to $1,013.90 an ounce at 2:27 p.m. in New York, according to Bloomberg generic pricing. Palladium, which climbed 2.4 percent on Friday, headed for a fourth straight weekly drop.
The recent declines have put a halt to an earlier rally in 2016, paring this year’s gain to 14 percent. Investors have speculated that resilient automotive sales would boost consumption. The metal has also increased alongside gold, which is up more than 20 percent in 2016 as the Federal Reserve’s decision to delay raising interest rates further boosted the metals’ appeal as a store of value.
Gains in precious metals have slowed in the second half of this year amid mixed signals on rates from the Fed, which meets next week. The Bank of Japan is scheduled to hold policy meetings on Wednesday.
The dollar climbed 1.1 percent this week against a basket of major currencies, reducing the appeal of precious metals as alternative assets.
In other precious metals news:
- Gold futures for December delivery slid 0.6 percent to settle at $1,310.20 an ounce on the Comex in New York. Silver futures also declined.
- Holdings in exchange-traded funds backed by gold declined 4.3 metric tons to 2,014.6 tons on Thursday, the lowest since July 29, data compiled by Bloomberg show.