Commodities : Thursday, Aug. 13, 1987 : Precious Metals Prices Drop

Precious metals futures retreated sharply Thursday, as investors ignored the continuing mineworkers strike in South Africa.

Platinum and silver futures posted the sharpest declines among the metals, although the losses were trimmed a little in late trading.

With the mining strike spreading to refinery workers, the news out of South Africa should have been supportive to metals futures, said Craig Sloane, an analyst in New York with Smith Barney, Harris Upham & Co.

“But the market didn’t react,” he said. “Instead, it seemed ... related to how strong the bond market was. Bonds acted well for the first time in quite a while.”

Treasury bond futures on the Chicago Board of Trade gained 1 1-32 points, with the September contract settling at 90 15-32 points. A point is equal to $10 for every $1,000 in face value.

“Metals are an alternative investment,” Sloane said. “Stocks have been doing superb and now bonds are doing well,” luring money out of the metals.

Also, with crude oil prices declining again, the implication is for less pressure on inflation, which is negative for precious metals.