Platinum and palladium climbed close to 1.5% on Tuesday in the wake of fears of supply shortfalls as South Africa deployed more police to the platinum belt where striking miners have killed four people going back to work over the weekend.
Gold was almost flat as investors reflected on reports that US retail sales ground to a sharp stop in April, although the news didn’t dampen the view that the economy was set to grow faster in the second quarter. US stocks gauged by the S&P 500 posted record highs to hit 1,900 for the first time, putting a check on the precious metal, as Reuters reports.
South Africa has suffered a four-month strike, the longest and most costly such action in the largest producer of platinum in the world, cutting almost 40% of normal output.
“A sudden end to the strike would lead to a sharp drop but we believe the market is working under a structural production/consumption deficit and we are therefore bullish medium-to-longer term,” said precious metal analyst James Steel of HSBC.
The per-ounce price of platinum for immediate settlement added 1.3% to $1,450.50 as of 12:30 pm. Palladium increased 1.4% to $813.50 per ounce.
June delivery platinum future jumped $16 to $1,457.90 per ounce on the US NYMEX. Volume traded was on course to rise sharply above the average for 30 days.
Platinum’s premium to gold expanded to its highest point since mid January at nearly $155 as producers kept alive their resolve to resume production.
According to Fox, the tensions in Ukraine have kept gold afloat over the last month, preventing the commodity from tumbling lower.
Palladium prices also increased on fears that supplies would be interrupted due to a persistent stand-off between near the border of Ukraine and Russia, which is the world’s top producer of the metal.
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