COMMODITIES : Platinum, Silver Futures Advance
Platinum futures prices surged Friday in response to a government report showing that the national unemployment rate dropped in April to its lowest level since June, 1974.
Silver futures also advanced while gold moved lower.
On other markets, energy futures were higher; grains and soybeans were mixed; livestock and meat futures were mixed, and stock index futures retreated.
Among the precious metals, platinum futures showed the sharpest reaction to April’s 5.4% jobless rate. The platinum contract for delivery in July jumped $5.40 to $526.60 an ounce on the New York Mercantile Exchange.
But silver gained, too, and analysts said the net impact of the unemployment report on the metals markets was positive.
Robust Economy
“I’m not surprised there’s a little jockeying going on, with silver and platinum higher and gold a little lower. Maybe Monday it’ll be the reverse,” said Richard Levine, vice president of precious metals and foreign exchange trading with Elders Futures Inc.
The report’s implications for a robust economy supported notions that consumer prices are bound to rise, which could stir more demand for precious metals, analysts said.
Platinum prices got an extra boost because a growing economy would mean greater industrial demand for the metal.
“Some parts of the report have to be viewed as having potential for inflation,” said Craig Sloane, an analyst in New York with Smith Barney, Harris Upham & Co.
“Work hours were up, hourly wage was up, overtime hours were up,” Levine said. “We’re talking about an economy that’s really moving along in terms of employment.”
At the Commodity Exchange in New York, gold settled $1.70 to $1.80 lower, with June at $445.30 an ounce; silver was 1.5 cents to 2.2 cents higher, with May at $6.381 an ounce.
Oil futures climbed substantially higher on the New York Mercantile Exchange in response to the International Energy Agency’s prediction of rising world demand.
In its monthly report, the group predicted a 1.9% increase in global oil demand this year, compared to an increase of 1.45% last year, said Bob Baker, an analyst in New York with Prudential-Bache Securities Inc.
West Texas Intermediate crude oil settled 11 cents to 35 cents higher, with June at $17.74 cents a barrel; heating oil was 0.13 cent to 0.85 cent higher, with June at 47.42 cents a gallon, and unleaded gasoline was 0.30 cent to 0.91 cent higher, with June at 51.52 cents a gallon.
Soybeans, Wheat Gain
Soybean and wheat futures advanced on the Chicago Board of Trade while corn finished marginally lower in a session dominated by conflicting ideas about the weekend crop weather.
“Some weather guys have more rain in the forecast for the weekend and early next week and others have less,” said Victor Lespinasse, a trader for Dean Witter Reynolds Inc.
“The market was a little bit tentative, but it did seem to favor those who tend to think there will be little less rain than a little more,” he said.
The soybean market has been particularly sensitive to indications of dry weather because recent government reports indicate a poor crop could lead to a severe tightening of supplies.
Soybean planting is barely under way, Lespinasse said, and the corn crop is nearly half planted.
Wheat settled 1 cent to 3 cents higher, with May at $2.9775 a bushel; corn was unchanged to 1.25 cents lower, with May at $2.0175 a bushel; oats were 1/2 cent lower to 1 cent higher, with May at $1.61 a bushel, and soybeans were 2.50 cents to 4.25 cents higher, with May at $6.92 a bushel.
Cattle futures prices rose on the Chicago Mercantile Exchange as the futures market continued an upward adjustment aimed at reducing the steep discount of live cattle futures prices to cash cattle prices, analysts said.
Rally Expected
Most hog prices settled slightly lower as the market took a breather after four days of rising prices, said Tom Morgan, president of Sterling Research Corp. of Arlington Heights, Ill.
“A lot of people are expecting a rally in the cash hogs and the futures rallied earlier this week in anticipation of that,” he said.
Live cattle settled unchanged to 0.55 cent higher, with June at 72.70 cents a pound; feeder cattle were unchanged to 0.25 cent higher, with May at 79.77 cents a pound; hogs were 0.23 cent lower to 0.10 cent higher, with June at 51.65 cents a pound, and frozen pork bellies were 0.23 cent to 1.07 cents lower, with May at 52 cents a pound.
Stock index futures fell on the Chicago Mercantile Exchange, where the contract for June delivery of the Standard & Poor’s 500 index settled 1.20 points lower at 258.15.
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