COMMODITIES : Early Gains in Oil Prices Boost Precious Metals

Platinum futures prices surged above $500 an ounce Monday, helped by early gains in oil prices and a generally positive economic outlook.

Oil prices settled mixed, however. On other markets, gold and silver futures advanced; soybean futures were sharply higher, while grains were mixed; livestock and meat futures were mixed, and stock index futures retreated.

The contract for April delivery of platinum settled $6.90 higher at $504.20 on the New York Mercantile Exchange. The move marked only the second time since Jan. 20 that the April platinum contract has finished above the psychologically important $500 barrier.

Analysts said gains Monday in all the precious metals--platinum, gold, silver and palladium--were driven primarily by a sharp increase in crude oil futures prices early in the day.

But when oil prices later fell steeply, the metals gave up only some of their gains, indicating other supportive factors were at work.

‘Vote of Confidence’

The weak dollar, increased U.S. auto sales and the generally positive tone of recent economic data are all bullish for metals prices, said Jacques Luben, executive director of investments for the Platinum Guild International.

“It seems as though the consensus is that interest rates will remain relatively low for the remainder of the year, we may see higher inflation and we probably won’t see a recession this year,” Luben said.

Monday’s performance was “a reassuring vote of confidence for the metals” but the next few sessions will show just how deep that confidence runs, said Jack Barbanel, director of futures trading for Gruntal & Co. in New York.

“We’re either at the early stage of some new buying momentum or we’re seeing an upside correction in a downside metals market,” he said.

On New York’s Commodity Exchange, gold settled $4.90 to $7.20 higher, with April at $449.20 an ounce; silver was 8 cents to 10.3 cents higher, with March at $6.447 an ounce.

Crude oil’s early jump above $17 a barrel on the New York Mercantile Exchange was triggered partly by speculation that OPEC President Rilwanu Lukman would announce a meeting of OPEC’s pricing committee at a Tuesday news conference, said Nauman Barakat, an analyst with Smith Barney, Harris Upham & Co.

But prices came tumbling down later in the session when Saudi Arabia’s King Fahd confirmed that the country was “offering discounts, quite indiscriminately, to almost everybody,” Barakat said.

Soybeans, Corn Higher

West Texas Intermediate crude oil settled 9 cents lower to 8 cents higher, with April at $16.49 a barrel; heating oil was .12 cent lower to .35 cent higher, with April at 45.40 cents a gallon, and unleaded gasoline was unchanged to .12 cent higher, with April at 46.11 cents a gallon.

Soybean and corn futures settled sharply higher on the Chicago Board of Trade while wheat prices fell.

Soybean futures rose early in the session on rumors of new Soviet buying and got a boost later in the day when the agricultural newsletter Safras y Mercado dropped its Brazilian soybean crop estimate by 400,000 metric tons because of dry weather, said Victor Lespinasse, a trader for Dean Witter Reynolds Inc.

Wheat settled 2 3/4 cents lower to 1/2 cent higher, with March at $2.96 a bushel; corn was 2 1/2 cents to 4 3/4 cents higher, with March at $2.01 1/2 a bushel; oats were 5 1/2 cents lower to 1/2 cent higher, with March at $1.90 1/2 a bushel, and soybeans were 6 cents to 10 cents higher, with March at $6.30 a bushel.