COMMODITIES : Precious Metals Futures Stage Comeback

Platinum futures prices rose sharply Monday on speculative buying, leading gold and silver higher in what analysts said may indicate a bullish turnaround in the precious metals market.

On other futures markets, cattle, grains, soybeans and stock index futures advanced while pork futures were mixed.

Precious metals prices appear to be steadying and may be charting an upward course after falling sharply last month, analysts said.

Platinum is expected to be in short supply for the next five years and does not face technical resistance as stiff as that which gold and silver must overcome to rally substantially, they said.

But the gold and silver markets also have shown surprising resilience in the past 10 days, defying some analysts’ predictions that gold was heading back below $400 an ounce.

“There’s some bullish tone for the first time in quite awhile. It smells more bullish at these levels than it did before,” said Richard Levine, vice president of the precious metals and foreign exchange group at Elders Futures Inc. in New York.

Platinum settled $9.70 to $11.20 higher on the New York Mercantile Exchange, with the contract for delivery in October at $538.40 an ounce.

On New York’s Commodity Exchange, gold settled $3 to $3.10 higher, with the spot October contract at $412.20 an ounce and December at $415.50; silver was 4 cents higher across the board, with December at $6.475 an ounce on the Comex.

Momentum Building

Monday’s weaker dollar and higher energy markets helped boost the inflation-sensitive precious metals but there was more to the buying, Levine said.

“It’s not just because of crude or just because of the lower dollar,” he said. “There’s some momentum building here that I just didn’t see when gold was at $406 (last week).”

The buying interest may be because of a readjustment of attitudes about inflation, said Paul Cain, manager of precious metals for New York-based Deak International, a large dealer of precious metals and foreign currencies.

Gold rallied late last year and early this year on fears of double-digit inflation, he said. Those worries eased--and gold prices fell--as monthly government reports showed inflation holding steady at 4% to 5%.

But now investors may be growing uncomfortable with even a 4% inflation rate and could be buying precious metals as an inflation hedge, Cain said.

Cattle futures made new life-of-contract highs in all delivery months on expectations that Friday’s quarterly cattle-on-feed report from the Agriculture Department will show the first quarterly decline since the spring of 1987 in the number of cattle being fattened for slaughter, analysts said.

Pork futures finished mixed on a combination of lower cash markets and spillover strength from the cattle pits.

Grain Futures Rise

Live cattle settled 0.18 to 0.60 cent higher, with October at 73.05 cents a pound; feeder cattle were 0.05 to 0.75 cent higher, with October at 82.22 cents a pound; hogs were unchanged to 0.55 cent higher, with October at 39.97 cents a pound, and frozen pork bellies were 0.28 cent lower to 0.10 cent higher, with February at 49.05 cents a pound.

Grain and soybean futures finished mostly higher on the Chicago Board of Trade in reaction to wet weather in the Corn Belt, dry conditions in the soybean fields of South America and new wheat demand from China, analysts said.

Wheat settled unchanged to 4 cents higher, with December at $4.3025 a bushel; corn was 0.25 cent to 1.25 cents higher, with December at $2.95 a bushel; oats were 0.50 cent to 2.75 cents higher, with December at $2.5525 a bushel, and soybeans were 5.5 to 8 cents higher, with November at $8.1075 a bushel.

Stock index futures rose strongly on the Chicago Mercantile Exchange, where the contract for December delivery of the Standard & Poor’s 500 index settled 1.35 points higher at 278.25.