December gold on Comex had traded as high as $1,297.40 an ounce on Aug. 28 at the time of writing.
Nevertheless, physical demand for the precious metal remains weak in key markets in Asia, namely China and India. Reuters reported July net gold flows into mainland China from Hong Kong fell to 22.107 tonnes from 40.543 tonnes in June, their lowest in three years.
Palladium was trading as high as $901.40 an ounce, basis the December contract, on the New York Mercantile Exchange (Nymex) on Aug. 28, following the latest news from Kiev.
The most active contract on Nymex had reached $902.75 an ounce, the highest for the most-active contract since Feb. 22, 2001, on Aug. 18.
Palladium has risen by more than 25 percent since March this year on worries over the fallout from Russia-Ukraine tensions. As reported here previously, investors are worried that Russia, which is the world’s biggest supplier of the precious metal, may reduce its palladium shipments to export markets in retaliation for U.S. and E.U. economic sanctions against the country for its involvement in Ukraine.
Concerns over further labour strikes in South Africa, the second largest producer of palladium and the world’s biggest platinum producer, are also fuelling supply concerns. According to a Reuters news report early this week, platinum group metals producer Lonmin aims to cut around 5,700 jobs, about 21 percent of its South African workforce, as part of a drive to restore profits after a five-month labour strike this year. Quoting two unidentified mining sources, the news provider said the plan would see the closure of four to six of the company’s 11 shafts.
Lonmin, however, has said the press speculation is “entirely without foundation”.
“No decisions, about the size and shape of any restructuring of the business, have been made,” the company said in a Aug. 26 statement. “Lonmin’s immediate focus following the five-month strike is to achieve a safe ramp-up of production in order to rebuild the business and restore profitability.”
Anglo American Platinum (Amplats), whose South African mines were also affected by the five-month industrial dispute, earlier said it plans to sell or spin off a number of the mines that were closed during this year’s strike.
Impala Platinum (Implats), the third producer affected by the platinum belt mine strike, said in a Aug. 28 results statement, it has initiated a comprehensive strategic re-planning exercise “to assess the full impact of low pgm prices and the strike consequence”. The company reported headline earnings per share were 74% lower at 86 [South African] cents for its financial year ending June 30.
October platinum futures on Nymex had traded a high of $1,431.20 an ounce during trading on Aug. 28 at the time of writing, having settled at $1,419.90 the previous day. In early July, the Nymex October contract hit a 10-month high of $1,515 an ounce.
Oil prices tick up
Crude oil prices this week ticked up from the 14-month lows in the case of Brent and a nine-months’ dip for the U.S. benchmark West Texas Intermediate (WTI) as geopolitical worries about Ukraine and Libya intensify. Brent for October delivery on London’s ICE Futures Europe exchange climbed to $103.50 a barrel on Aug. 26 while October WTI on Nymex reached $94.5 a barrel.
By midweek, however, both Brent and WTI had moved lower once more, with the October benchmarks settling at respectively $102.72 and $93.88 a barrel. Even another fall in U.S. crude stocks last week – by 2.1 million barrels to 360.5 million, according to U.S. Energy Information Administration (EIA) data, and the lowest since Jan. 31, had little impact on price levels.
While Brent moved back above $103 a barrel on Aug. 28 to trade as high as $103.20 and October WTI had touched $95.70, analysts said short of any major supply outages, gains were likely to be limited by the ample global supplies and the continuing weak demand outlook.
October Brent had dipped to a near 14-month low of 101.09 a barrel on Aug. 18 while October WTI dropped to $92.50 a barrel, the lowest for a front-month contract since mid-January.
While care has been taken to ensure that the information contained in this report is accurate, it is supplied without guarantee. The author can accept no responsibility for any errors or any consequence arising from the information provided.
