BLBG: Platinum Falls as Recession May Curb Demand; Palladium Gains
Platinum futures fell in New York on speculation that demand for the metal used by the auto industry and jewelry makers won’t recover anytime soon because of the global recession. Palladium gained.
The International Monetary Fund said yesterday that the global economy will probably contract by 0.5 percent to 1 percent this year, the first worldwide decline in 60 years. Platinum dropped 41 percent in the past 12 months. The metal is used mostly in pollution-control devices in cars.
“Lest doubts remain about the general direction of the global economy, the latest projections from the IMF should lay any lingering ones to permanent rest,” Jon Nadler, a senior analyst at Kitco Inc. in Montreal, said in a note.
Platinum futures for April delivery fell $7.60, or 0.7 percent, to $1,114.20 an ounce on the New York Mercantile Exchange.
The price still gained 4.8 percent this week, ending a three-week slide. The metal is up 18 percent this year.
Commodities surged yesterday on inflation concerns after the Federal Reserve said on March 18 that it plans to buy as much as $1.15 trillion in government and mortgage debt.
“No one knows how the government’s massive spending plans will eventually pan out, but in the short term, we do think commodities are getting slightly ahead of themselves, given the daunting macro backdrop,” Edward Meir, an analyst at MF Global Ltd. in Darien, Connecticut, said today in a report. “Prices will need to draw strength from industrial demand, which is still noticeably absent.”
Alternative-Asset Demand
In February, gold prices climbed to an 11-month high on demand for an alternative to slumping equities and bonds.
“Until we start to see demonstrable, clear news that the global economy is turning around, silver, platinum and palladium will underperform gold,” Dennis Gartman, an economist and the editor of the Gartman Letter in Suffolk, Virginia, said today in a Bloomberg Television interview.
Palladium futures for June delivery rose $4.90, or 2.4 percent, to $210.90 an ounce. The metal gained 5.5 percent this week and is up 12 percent this year.
