COMMODITIES : Platinum Futures Prices Fall Sharply as Dollar Gains
Platinum futures prices fell sharply Wednesday as the dollar gained strength ahead of today’s report on the U.S. trade deficit, which many traders expected to show a lessening of the import-export gap.
The dollar’s advance against most foreign currencies also contributed to weakness in the other precious metals, analysts said.
On other exchanges, soybean and grain prices fell; crude oil futures edged higher; livestock and meat were down, and stock index futures retreated.
Fairly heavy selling of platinum futures by foreign investors sparked the decline in the precious-metals complex, analysts said. The active June gold contract cracked the psychologically important level of $450 an ounce on New York’s Commodity Exchange, but buying interest then surfaced to halt the slide and held losses to $4 to $5.
Platinum plunged $16.30 across the board on the New York Mercantile Exchange, where the contract for delivery in July settled at $522.80 an ounce.
Expectations of a sharp reduction in the February trade deficit from January’s $12.4 billion added to the negative tone in precious metals, said Stephen Platt, an analyst in Chicago for Dean Witter Reynolds Inc.
“What traders are looking at is the dollar’s strength and the subsequent limiting of any strong investment demand by the U.S. in precious metals if that does occur,” Platt said. Working in favor of higher gold prices, however, was a drop in supplies at commodity exchange warehouses, said Jerry Rothman, an analyst at Elders Futures Inc.
The relatively tight supplies of deliverable gold stocks indicates that “in the longer term, the price of gold should tend to move upwards,” Rothman said.
Gold settled $3.90 to $5.50 lower, with June at $449.60 an ounce; silver was 7.5 cents to 8.7 cents lower, with May at $6.345 an ounce.
Crude oil moved higher on the New York Mercantile Exchange for the third consecutive session on rumors that the Organization of Petroleum Exporting Countries would declare their April 25 meeting an emergency session, said Nauman Barakat of Smith Barney, Harris Upham & Co. in New York.
Such a declaration would enable the oil ministers to take action to limit production, Barakat said.
West Texas Intermediate crude oil settled 3 cents to 15 cents higher, with May at $18.12 a barrel; heating oil was 0.02 cent lower to 0.11 cent higher, with May at 49.02 cents a gallon, and unleaded gasoline was 0.31 cent to 0.54 cent higher, with May at 52.42 cents a gallon.
Stock index futures retreated slightly on the Chicago Mercantile Exchange where the contract for June delivery of the Standard & Poor’s 500 index settled 0.45 point lower at 272.10. The underlying spot index advanced 0.21 point to close at 271.58.
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