Platinum sank to the lowest level since 2009 as a surge in the dollar curbed investor interest, extending the first quarterly loss this year spurred by the resumption of output in South Africa after a strike. Gold fell toward a nine-month low.
The metal for immediate delivery declined as much as 1.3 percent to $1,284.25 an ounce, the lowest price since Oct. 5, 2009, extending a retreat from a 10-month high of $1,519.68 in July. It traded at $1,284.25 by 11 a.m. in Singapore, according to Bloomberg generic pricing. Gold slid as much as 0.3 percent to $1,204.75 after dropping yesterday to $1,204.57, the lowest since Jan. 2.
Platinum declined 6.3 percent this year even as demand for the metal used in pollution-control devices in cars improved, and supplies from the world’s largest producer were curbed by labor disputes. Holdings in exchange-traded products backed by platinum are near a four-month low after expanding to a record in July. The Bloomberg Dollar Spot Index rose to a four-year high on expectations for higher U.S. interest rates, making the metal more expensive for holders of other currencies.
“The platinum group metals are worn lower by weak gold, a strong U.S. dollar and heavy speculative liquidation,” James Steel, an analyst at HSBC Securities (USA) Inc., wrote in a note. “Further losses in both PGMs will encourage trade and end-user physical buying. But we expect platinum may go well below $1,300 and palladium to drop to $750 before this buying materializes.”
Platinum’s decline took the 14-day relative strength index below 30 for an 18th day today, signaling to some investors who study technical charts that prices may be poised for a rebound. The metal’s retreat came as palladium dropped to a six-month low and silver sank to the lowest in more than four years.
The metal retreated 12 percent in the third quarter, the biggest such loss since the three months to June 2013, on signs of slowing economic growth in Europe. The region accounts for 25 percent of global demand. Prices yesterday completed a third monthly drop after a strike that disrupted mine output in South Africa, the world’s biggest producer, ended in June.
Platinum for January delivery fell 1.2 percent to $1,284.50 an ounce in New York, the lowest for a most-active contract since Oct. 5, 2009. Open interest in futures and options slid to a five-month low in the week ended Sept. 23, according to U.S. government data.
The 60-day historical volatility is near the lowest since 1996 amid fading investor interest, according to data compiled by Bloomberg. The net-long position in New York futures and options fell for a third week to the lowest this year in the week ended Sept. 23, with speculators boosting short bets for a sixth week to the highest this year, U.S. government data show.
Prices are expected to be “muted” in the near term as the market is oversupplied, Credit Suisse Group AG said on Sept. 23. The market isn’t in a structural deficit, just a strike-induced one, Goldman Sachs Group Inc. said in a July report after the stoppage ended in June.
Palladium for immediate delivery slid 0.5 percent to $769.65 an ounce, after prices declined to $766.75 yesterday, the lowest level since April. Spot silver traded at $16.9526 an ounce from $16.9755 yesterday, when the metal dropped to $16.8747, the lowest price since March 2010.
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