Platinum Futures Drop to Five-Year Low on Europe Woes

Platinum futures dropped to a five-year low on signs that European demand is faltering for the metal used in pollution-control devices in cars. Gold rebounded from an eight-month low.

In September, platinum in tumbled 8.7 percent, the most in more than two years, while a manufacturing gauge for Germany, Europe’s largest economy, slid to a 15-month low, data showed today. Italy’s government cut its growth forecast for 2014 and


In the third quarter, platinum fell 12 percent, the most in more than a year, amid signs of slowing economic growth in Europe. The region accounts for 25 percent of global demand. Holdings in exchange-traded products backed by the metal are close to a four-month low, and money managers cut their bullish wagers for three straight weeks, the longest streak in 2014.

“It’s been a double-whammy negative, most notably because platinum is used in diesel vehicles, and the biggest diesel-auto market is in Europe,” Mike McGlone, a research director at ETF Securities U.S. in New York, said in a telephone interview. “Europe recession fears are high, meaning potentially less direct demand.”

Platinum futures for January delivery declined 0.8 percent to settle at $1,289.60 an ounce at 1:20 p.m. on the New York Mercantile Exchange. Earlier, the price touched $1,263.60, the lowest for a most-active contract since Sept. 8, 2009.

Falling Volatility

Prices in September fell for the third straight month after workers in June ended a strike that disrupted mine output in South Africa, the world’s biggest producer. Catalytic converters in cars account for about 38 percent of platinum demand, according to Johnson Matthey Plc.

The metal’s 60-day historical volatility last week reached the lowest since February 1997 amid fading investor interest, according to data compiled by Bloomberg. The net-long position in New York futures and options fell 22 percent to 17,814 contracts as of Sept. 23, U.S. government data show. That was the biggest drop since November.

Palladium futures for December delivery gained 1.2 percent to $784.55 an ounce. The price touched $763.90, the lowest since April 7.

Gold futures for December delivery rose 0.3 percent to $1,215.50 an ounce on the Comex in New York. Earlier, the price dropped as much as 0.5 percent. Yesterday, the metal touched $1,204.30, the lowest since Jan. 2.

U.S. manufacturing in September was weaker than expected, data from the Institute for Supply Management showed today.

“The weak ISM data caused a breakdown in the dollar and equity market, and due to that, we’re seeing a surge up in gold,” Phil Streible, a senior market strategist at RJO Futures in Chicago, said in a telephone interview.

Silver futures for December delivery climbed 1.2 percent to $17.259 an ounce, the biggest gain since July 17. Yesterday, the price touched $16.85, the lowest since March 26, 2010.

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