Commodities Tuesday, Nov. 18, 1986 : Precious-Metals Prices Gain

Precious-metals futures prices advanced sharply Tuesday, but the move didn’t inspire much confidence that a recent decline is over. Platinum futures gained about $12 an ounce after two consecutive sessions of limit losses, while gold was up more than $5 an ounce.

The recovery in metals was “a mild, but unimpressive, consolidation rally,” said Bill O’Neill, an analyst in New York with Elders Futures. “The momentum of the selloff just abated for a while.” Platinum had slumped to its lowest level in three months, losing much of its premium over gold--dropping from about $280 an ounce above gold to $100.

Gold hasn’t done well lately either, slipping below $400 an ounce last Friday for the first time since August.

“Platinum certainly has lost the leadership quality it had for a while because of the South Africa situation,” O’Neill said. South Africa is the major producer among non-Communist nations and platinum put on a striking rally over a period of months. This was based largely on speculation that racial turmoil or sanctions taken against South Africa because of its apartheid policy could result in disrupted supplies of the metal.