Platinum, Palladium Sag After U.S. Car Sales, China Factory Data

  • Caixin purchasing managers index in China contracts again
  • Gold price will be dictated by economic figures, Marex says

Gold Inches Higher for a Second Day

Palladium fell and platinum posted its sixth loss in seven sessions as a drop in U.S. vehicle sales and sluggish Chinese manufacturing added to demand concerns on the metals, used in auto pollution-control devices.

Sales at General Motors Co. and Ford Motor Co. slid more than expected in May, reports showed Wednesday. A private purchasing managers index fell to 49.2, marking a fifteenth straight month the measure was below 50, the dividing line between improving and deteriorating conditions. The nation’s official factory gauge stood at 50.1 in May.

Platinum and palladium had the biggest drops since November last month as global demand concerns resurfaced, even as improving U.S. growth boosted odds that the Federal Reserve will raise interest rates. Higher rates erode the appeal of precious metals, which don’t pay interest. China equities fell as the official factory gauge failed to ease worries on the economic outlook.

“Once again, we continue to have these concerns coming out of China,” David Meger, the director of metals trading at High Ridge Futures in Chicago, said in a telephone interview. “We know in general that’s not good for commodities markets.”

Platinum futures for July delivery dropped 0.9 percent to settle at $971.90 an ounce at 1:14 p.m. on the New York Mercantile Exchange. Palladium futures for September delivery fell 0.1 percent to $546.75 an ounce.

The Organisation for Economic Cooperation and Development’s chief Angel Gurria says the global economic recovery won’t pick up this year and will improve only slightly in 2017. Manufacturing in the 19-nation euro area barely grew in May, damping confidence in the strength of the region’s economic recovery, according to Markit Economics.

In other metals:

  • Gold futures for August delivery slid 0.2 percent to $1,214.70 an ounce on the Comex in New York.
  • Holdings in exchange-traded funds backed by gold were little changed at 1,842.9 metric tons as of Tuesday, data compiled by Bloomberg show.
  • Silver futures declined 0.4 percent to $15.927 an ounce Wednesday, after a 10 percent slump in May that was the biggest monthly drop since September 2014.
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