Foreign Exchange : Precious-Metals Prices Drop Sharply

Precious-metals prices, led by platinum, fell sharply Monday after the troubles in South Africa failed to raise the prices as many speculators had expected. The dollar, after drifting lower, ended the day a bit higher against major foreign currencies.

Platinum for current delivery fell $17.90 to $426.90 an ounce on the New York Mercantile Exchange. Gold was quoted at $336.50 an ounce at Republic National Bank in New York, down $9.75 from Friday’s bid.

“Precious metals had a very tough time today. There were major selloffs,” said Jack Barbanel, director of futures trading at Gruntal & Co. in New York. “Platinum led the decline. Platinum lost a good chunk of its momentum. Platinum took gold down as well.” Barbanel added: “There was a lot of buying prior to today on expectations that we would have some serious trouble in Africa on the 10th anniversary of the Soweto riots. The expectations were much exaggerated. There was some violence but it didn’t affect the mining.”