BLBG: Platinum Falls on Industrial Demand Outlook; Palladium Steady
Platinum fell from a four-month high in New York on concern that demand for the metal used mostly in car parts and jewelry will fall as the U.S. economy shrinks. Palladium was little changed.
President Barack Obama’s stimulus plan won’t be enough to avert the biggest U.S. economic decline since 1946, according to a monthly Bloomberg News survey. The world’s largest economy will contract 2 percent this year, according to the survey. U.S. auto deliveries tumbled 37 percent in January from a year earlier to the lowest since 1982, research firm Autodata Corp. said Feb. 4.
“Carmaker woes have taken a back seat of late, with the entire economy coming under scrutiny and being very much in question,” Jon Nadler, a senior analyst at Kitco Inc. in Montreal, said in a report today.
Platinum futures for April delivery fell $5.70, or 0.4 percent, to $1,076.70 at 9:53 a.m. on the New York Mercantile Exchange, after earlier reaching $1,095.80, the highest since Sept. 30. The price, down 53 percent from a record $2,308.80 an ounce on March 4, still is up 15 percent this year.
“The precious metals continue to hold the upward move but are encountering resistance at these new levels,” Miguel Perez- Santalla, a sales vice president at Heraeus Precious Metals Management in New York, said in an e-mail. “Platinum still has room on the upside, but gold may not follow. Volatility is high. Caution is advised.”
Palladium futures for March delivery rose 20 cents to $216 an ounce in New York, after earlier dropping as low as $214.90. The price is up 15 percent this year after plunging 50 percent in 2008.
Slumping Demand
Platinum and palladium prices tumbled last year as slumping auto sales eroded demand for the metals used in pollution-control devices. Automakers account for about half of global platinum and palladium consumption, according to Johnson Matthey Plc estimates. The metals are also used in jewelry and by investors to hedge against inflation and losses in other markets.
Congress reached an agreement yesterday on a $789 billion stimulus bill sought by Obama, who said the measure will create or save as many as 4 million jobs.
“Yesterday’s news that the U.S. House and Senate reached a quick, tentative compromise on the stimulus bill did not do much for markets, as this likelihood was fairly well discounted,” Edward Meir, a Darien, Connecticut-based MF Global Ltd. analyst, said in a report.
