great day for platinum
SYDNEY (Dow Jones)--Spot platinum surged 7% to a record high in Asia Tuesday, while some Tokyo futures contracts traded limit-up for a second straight day.
Traders in the region said they were unaware of any supply and demand news flow driving the buying spree, instead attributing the surge to "a squeeze on the forwards" and follow-through speculative buying from the overnight sessions.
Platinum prices have rallied 18% since late last week, leaving other precious metals gold and silver languishing in narrow trading ranges.
Traders and analysts are divided on the reasons behind current investor interest in the metal, used in jewelry and as a catalytic converter in automobiles, although some emphasize options-related activity.
One dealer said a commodity fund has a large call option in Zurich which expires at the end of the month. That means when prices rally, dealers buy to hedge their positions and when prices fall they sell long hedges.
Other participants credited the metal's current appeal to a strong fundamental outlook presented in last week's Johnson Matthey industry report and expectations that auto makers will focus more on diesel vehicles, which require platinum.
Yet others cite tight supplies, as evidenced by high lease rates. Lingering rumors of the impending launch of an exchange traded fund backed by the metal is also credited.
Platinum for immediate delivery climbed $89 on its New York close overnight to $1,345 a troy ounce at around 0215 GMT Tuesday, beating cyclical highs posted in May this year.
Investor interest in the precious metal extended to the Tokyo Commodity Exchange, or Tocom, where some contracts traded up to their daily limit for the second straight day.
Tocom's most-active October platinum contract was trading at Y4,527 a gram in morning hours, up Y125 on Monday's close, while the February, April and June contracts hit their Y150 upper limits and December was up Y256.
By comparison, other precious metals were subdued in Asian hours Tuesday.
At 0220 GMT spot gold was trading up $2 on its New York close to $623.90 an ounce, while silver was up 6 cents at $12.81 and palladium was unchanged at $321.
-By James Attwood, Dow Jones Newswires; 612-8235-2957; [email protected] -Edited by Jarrett Banks
(END) Dow Jones Newswires November 20, 2006 21:41 ET (02:41 GMT) Copyright (c) 2006 Dow Jones & Company, Inc.
SLV Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
