BLBG: Platinum Falls in London on Concern About Flu’s Effect on Trade
Platinum fell for a third day in London, the metal’s worst losing streak since January, as commodities slid on concern that the swine-flu outbreak will hamper efforts to revive trade and economies, curbing demand.
Crude oil dropped for a second day, and industrial metals also retreated. Gold fell below $900 an ounce. The auto industry accounts for about half of platinum use, according to metals researcher and refiner Johnson Matthey Plc.
“Obviously there is potential for a significant impact on global trade and the world economy,” said Dan Smith, an analyst at Standard Chartered Bank in London. “It is seen as another potential setback,” he said of the virus.
Platinum for immediate delivery lost $46, or 4 percent, to $1,098 an ounce at 10:06 a.m. local time. The metal dropped for four days through Jan. 15. Palladium, also used by carmakers, fell $10, or 4.4 percent, to $215.75 an ounce.
The flu is no longer containable, the World Health Organization said, raising its global pandemic alert to the highest level since the warning system was adopted in 2005. The virus has been confirmed in Mexico, the U.K., the U.S., Canada and Spain, and it may have spread as far as New Zealand.
“With investors fearful of the spreading swine-flu virus, risk appetite could remain under pressure today, which could further benefit the greenback,” Manqoba Madinane, an analyst at Standard Bank Group Ltd. in Johannesburg, said in a report.
Oil, Copper
The Dollar Index,, which tracks the currency against the euro and five other monies, was little changed after yesterday’s 1.2 percent climb, the biggest in two months. Precious metals and the dollar tend to move in opposite directions.
Crude retreated for a second day, reducing metals’ appeal as a hedge against accelerating consumer prices, on concern that the flu outbreak will hurt travel demand. The virus is having the heaviest effect on energy, Morgan Stanley said yesterday in a report. Copper for three-month delivery declined as much as 3.6 percent on the London Metal Exchange today.
“There is a sell-off in commodities as a whole today, and that is having a negative impact on gold,” said Daniel Major, an analyst at RBS Global Banking and Markets in London.
Gold for immediate delivery fell $9.92, or 1.1 percent, to $896.58 an ounce, rebounding from a slide of as much as 1.6 percent. The metal slipped 0.7 percent yesterday after posting its first weekly climb in five weeks.
“The last time we saw bird flu, demand for gold out of Asia vanished,” Michael Blumenroth, a trader at Deutsche Bank AG in Frankfurt, said by telephone. “It is the same problem at the moment. If it spreads further, it will be bad for every market.”
Holdings in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, remained at 1,104.45 metric tons for a third day yesterday.
