Platinum prices sink to July 2009 lows

Thursday, March 12, 2015

Platinum prices dropped to their lowest level since July 2009 as less than impressive global demand drivers prompted a sell-off in the precious metal. Spot prices closed 0.88% lower yesterday, extending the bearish run of prices for a seventh straight session adding to the slump which has seen the metal lose just over 5% since the start of the month. Lacklustre Chinese data released earlier this week acted as a dampener to platinum prices with auto and jewellery sales facing considerable headwinds as the economy struggles to sustain momentum. Intraday price moves traded as lows as $1,114.05/oz yesterday before a partial recovery saw prices end the day just above $1,120/oz. Activity early on this morning has seen a modest rebound with prices building on yesterday’s close and recovering all of yesterday’s losses on improving risk appetite overnight, sending prices back above $1,130/oz. 

The euro dropped to a fresh 12 year low against the dollar while the pound touched a seven year high against the single currency as the ECB pushed on with its asset purchase programme. After a brief pause on Monday, euro outflows continued on Tuesday and Wednesday with yesterday’s moves pushing the currency towards 1.05 against the greenback as it edged closer and closer to dollar parity. Economic divergence between the US and eurozone which prompted Draghi to initiate a QE programme worth more than €1 trillion has seen the euro lose 7.7% against the dollar since breaking out of the sideways consolidation which dominated much of last month’s trading activity. Sterling rallied for a seventh straight session against the euro, reaching a seven year high as it briefly hit 1.4256 as comments from Bank of England policy maker Ian McCafferty and Governor Mark Carney assured market participants that they were looking past what was seen as the temporary impact of lower oil prices on inflation.

Spot gold prices extended declines for a ninth consecutive session yesterday, trading back around a three month low as intraday dips saw the yellow metal edge briefly below $1,150/oz before closing five dollars higher, however, prices were still down 0.5% on the day. The stronger dollar has been a source of significant price pressure with the dollar index just falling short of the 100.00 mark yesterday, trading at an intraday high of 99.985, and heading for its biggest quarterly rise since 2008. With St Louis Fed president James Bullard becoming increasingly vocal about a Fed rate rise, stating that a speedy recovery in employment warrants an imminent rate rise, we could see further gains in the USD as investors increase their exposure to the US economy, adding further pressure to spot gold prices.

Platinum prices sink on flagging demand

XPT Curncy Platinum Spot Oz 2015 03 12 07 22 18

EUR loses further ground against USD

EUR Curncy Euro Spot 2015 03 12 07 31 46

Sterling rallies to seven year high against EUR

GBPEUR Curncy GBP EUR X RATE 2015 03 12 07 31 57

Events for today

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UK

Feb

RICS House Prices

0700

DE

Feb

CPI

0930

UK

Jan

Trade Balance & Non EU

1000

EZ

Jan

Industrial Production

1230

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Retail Sales

1230

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Jobless Claims

1400

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Business Inventories

1530

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EIA Nat Gas

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Apr   Brent Crude (ICE)

Topics: Gold, ECB, EUR, DXY, GBP, Platinum
More from: Kash Kamal