Platinum Drops as Europe Recession Deepens; Gold Rebounds
Platinum dropped the most in more than two weeks after a report showed Europe’s recession deepened more than economists forecast, spurring concern that metal demand will ebb. Gold fell to the lowest in more than a month.
Gross domestic product in the euro area fell 0.6 percent in the fourth quarter from the previous three months, the worst performance since the first quarter of 2009. Platinum has climbed 11 percent this year on lower output in South Africa, the world’s biggest producer.
“Economic worries about Europe are pushing platinum down,” Phil Streible, a senior commodity broker at R.J. O’Brien & Associates, said in a telephone interview. “The overall trend, however, is bullish as supply concerns remain.”
On the New York Mercantile Exchange, platinum futures for April delivery fell 1.1 percent to settle at $1,710.90 an ounce at 1:15 p.m. The price, which gained 2 percent in the previous two days, reached a 16-month high of $1,744.50 on Feb. 6.
Europe is the biggest market for platinum used in pollution-control devices in vehicles, according to London-based Johnson Matthey.
Gold futures for April delivery retreated 0.6 percent to $1,635.50 an ounce on the Comex in New York, extending this year’s loss to 2.4 percent. Earlier, the precious metal touched $1,632.80, the lowest for a most-active contract since Jan. 4.
Prices, which are trading below the 200-day moving average, may fall to $1,600, according to Sterling Smith, a Chicago-based commodity futures specialist at Citigroup Inc.
“The trend is very weak, and we could breach the $1,600 level,” Smith said in a telephone interview today. “I don’t see much reversal in the course.”
In the spot market, an ounce of platinum bought as many as 1.054 ounces of gold, the most since August 2011.
Silver futures for March delivery slid 1.7 percent to $30.353 an ounce in New York, after dropping to $30.21 the lowest since Jan. 11.
Palladium futures for March delivery slipped 1 percent to $764.05 an ounce on the Nymex, ending a four-session rally.
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