Gold firms, platinum soars on weak dollar
London, November 7, 2008
Gold firmed in Europe on Friday as the dollar weakened against the euro, boosting the precious metal's appeal as a currency hedge, while platinum surged 5 percent as investors sought bargains after recent price falls.
Traders are eyeing US non-farms payrolls data due out later in the session for clues as to the next direction of trade in precious metals.
Spot gold was quoted at $741.05/743.05 at 1038 GMT against $731.55 in late New York trade on Thursday.
Platinum was at $856/876 an ounce against $823, having earlier touched a high of $865.50. Its sister metal palladium tracked it higher to a peak of $230 an ounce, before easing to $224/234 against $214.50.
A supply outage in major producer South Africa, where Anglo Platinum said a smelter shutdown would cut output by up to 200,000 ounces.
A weaker dollar also helped platinum to rise, analysts said.
'People are looking at the charts and realising both platinum and palladium have broken out of the downtrend in the charts, and that is bringing in more funds on the long side,' says Mitsubishi precious metals strategist Tom Kendall.
'There is a reasonable chance that we have seen the lows in platinum, and probably in palladium also,' he added.
Interest in platinum has been renewed after the metal fell more than 50 percent from July onwards, with investors seeking to buy into the metal at lower prices, traders said.-Reuters