MW: Gold plunges below platinum first first time in six months
Gold prices plunged below platinum Wednesday for the first time in six months.
Platinum for April delivery PLJ2 traded at $1,684.70 an ounce, down $17.10, or 1%, on the Comex division of the New York Mercantile Exchange, while April gold GCJ2 stood at $1,648.40, down $45.80, or 2.7%.
Historically, platinum has traded at a premium to gold, but it fell below gold’s value in September.
“The only thing this points to right now is that the ‘fear’ trade is off right now,” Tim Murray, general manager of precious-metals marketing at Johnson Matthey, said in emailed comments.
“All signs at the moment point to a more positive outlook for the industrial metals (which include platinum and palladium), and therefore platinum has regained its premium to gold,” he said. “Platinum has also been helped by serious labor strife at a key producer (Impala Platinum) in South Africa, which lost a significant amount of production” in the first quarter of this year due to a strike.
Meanwhile, gold has taken a hit, trading around its lowest levels since January, after the U.S. Federal Reserve on Tuesday offered no hints that it’s likely to pursue further quantitative easing any time soon, providing support to the U.S. dollar DXY.
“The Fed adjusted the wording in its statement to take account of the slightly more positive economic outlook, paying tribute, for example, to the progress made on the U.S. labor market,” analysts at Commerzbank said in a note Wednesday.
Looking ahead, the analysts said they don’t expect that gold will continue to fall significantly. “In the past, brisk buying interest could be observed at around the current price level of $1,670 a troy ounce, which should lend support to the gold price,” they said.
