COMMODITIES : Precious Metals Futures Decline

Precious metals futures prices fell broadly Wednesday on profit taking as fears of inflation eased and the dollar gained strength against other currencies.

On other markets, soybean futures plummeted and prices retreated for an array of commodities, including grains, cotton, livestock and meat, oils and stock index futures.

Prices for future delivery of platinum, which has led the precious metals complex in posting impressive gains this month, dropped $11.20 an ounce across the board on the New York Mercantile Exchange.

The platinum contract for delivery in July settled at $579.40 an ounce. July platinum rose from $515 at the beginning of this month to a high of $597.50 at one point during Tuesday’s session.

Declining Commodity Prices

Analysts said the dollar’s gains, declining commodity prices and nervousness about today’s government report on the gross national product all contributed to the fall in precious metals prices.

“Mainly, there’s some uncertainty as to what the GNP number is going to be,” said Andrea Gould, director of investments for the Platinum Guild International in New York. “Whenever there is uncertainty and there are profits to be taken, they’ll take their profits.”

The Commodity Research Bureau’s index of 21 commodities, a rough indicator of inflation, fell sharply Wednesday, which spurred further selling of precious metals futures, analysts said.

Nevertheless, many technical and fundamental factors suggest that platinum, gold and silver will continue to rally, analysts said.

Tight Gold Supply

“I would categorize this as a normal correction following a meteoric advance in platinum since the beginning of the month,” said Bernard Savakl, an analyst in New York with Paine Webber Inc. “Nothing goes straight up like a rocket.”

Savakl noted that warehouse stocks of gold at the Commodity Exchange in New York fell about 185,000 ounces on Wednesday to a 10 1/2-year low of about 1.224 million ounces. The physical tightness is supportive for the gold market and “could be a prelude to an explosive upside move this summer,” he said.

On the Commodity Exchange, gold settled $6.20 to $7.50 lower, with June at $454.80 an ounce; silver was 16.2 cents to 18.2 cents lower, with May at $6.592 an ounce.

Soybean futures prices fell sharply on the Chicago Board of Trade after some meteorologists increased the amount of rain in their forecasts for early next week.

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