COMMODITIES : Precious Metals Fall Over Election Eve Jitters
Prices of platinum, gold and silver futures fell sharply Tuesday as nervous traders cashed out of the precious metals markets to await the presidential election results.
On other markets, copper futures posted strong gains after three days of declines; energy futures fell; grains and soybeans were mostly higher; livestock and meat were mixed, and stock index futures advanced.
The platinum market led the precious metals complex lower, partly on speculation that a likely Republican presidential victory would mean continued low inflation and low investment demand for precious metals, and partly on profit taking by traders unwilling to bet on the outcome of the presidential race.
“On the eve of the results of the presidential election, some people just determined there was too much risk involved in having any position and they went to liquidate,” said Richard Levine, vice president of precious metals and foreign exchange trading with Elders Futures Inc. in New York.
Gold Is Lower
After a month of solid gains, traders who had bought platinum futures in late September at prices below $500 an ounce realized substantial profits.
The contract for January delivery of platinum on the New York Mercantile Exchange settled at $573 an ounce, $14.80 below Monday’s final price.
On New York’s Commodity Exchange, gold was $3.60 to $3.70 lower, with December at $421.20 an ounce; silver was 9.7 to 10.6 cents lower, with December at $6.425 an ounce.
The dollar’s gains Tuesday against other currencies and the weakening oil market also contributed to the selloff of precious metals, said Peter Cardillo, commodities trading adviser with Josephthal & Co. in New York.
Despite Tuesday’s decline, platinum supplies are tight and are expected to remain so for the next several years.
“No matter who wins, I would not be surprised to see the rally pick up again,” Levine said.
Copper for December delivery jumped 3.4 cents to $1.423 a pound on the Comex on reports of an escalation in the Peruvian miners’ strike.
Oil Futures Retreat
Late Monday, news circulated that banking and petroleum industry workers might join the strike, which has brought copper mining and smelting operations to a halt. The strike in Peru, the world’s seventh-largest copper producer, entered its fourth week Tuesday.
The price advance followed three days of declines and analysts said the market was headed higher.
Oil futures prices retreated in thin, choppy trading on the New York Mercantile Exchange ahead of the Nov. 17 price committee meeting of the Organization of Petroleum Exporting Countries and the Nov. 21 gathering of the full cartel.
Grain and soybean futures finished mostly higher on the Chicago Board of Trade amid rumors of new export sales of wheat and expectations of a new long-term grain agreement with the Soviet Union.
Cattle futures were mostly higher while pork futures finished mixed in thin, featureless trading on the Chicago Mercantile Exchange.
