Friday, May 09, 2008; Posted: 05:44 AM
Of DOW JONES NEWSWIRES
Platinum climbed to a seven-week high Friday as European markets reacted to news of a new platinum investment product to launch in the U.S., while gold traded modestly higher, traders and analysts said.
As of 0914 GMT, spot platinum was trading at $2,090 a troy ounce, up 8% from Thursday's low and dragging spot palladium up 2.3% to $439/oz, a two-week high. Spot gold traded at the upper end of the week's range at $887/oz, while spot silver was at $16.95/oz, up 2.8% from Thursday's low.
UBS plans to launch two platinum exchange-traded notes on the New York Stock Exchange Friday. Two other exchange-traded products listed in Europe last year.
"It won't have any impact on lease rates or liquidity of spot metal in the market, but obviously it has had an impact on sentiment," said analyst Tom Kendall of Mitsubishi Corp. "The real question is how attractive such a narrow-focused product is to the majority of funds that it will be targeted at."
Platinum prices have risen over 36% this year as demand outstrips supply, stretched by power shortages in South Africa, the world's biggest platinum producing nation.
Near-term spot gold direction remains difficult to call, said Kendall, with markets unlikely to go short into the weekend.
Gold has received some support as the euro has strengthened against the dollar - trading above $1.5400. Comments by the European Central Bank Thursday suggested it isn't ready to start easing rates any time soon. This enabled the euro to recover its earlier losses against the dollar, though it failed to make any gains.
For Friday, traders will watch for data on the U.S. trade balance for March at 1230 GMT. Economists expect that the U.S. trade shortfall with the rest of the world narrowed to $61.5 billion, from February's $62.3 billion.
Elsewhere, oil prices remain high, with NYMEX WTI testing $125 a barrel, noted Standard Bank. The bank said that with global equities generally reacting to inflationary threats and the possibility of tight monetary policy by central banks for the foreseeable future, "This should provide good support for precious metals to the downside."
-By Melanie Burton, Dow Jones Newswires; +44 (0)20 7842 9412; melanie.burton@dowjones.com
(END) Dow Jones Newswires
05-09-08 0544ET
More News:
Market Updates |
Stock Alerts |
All Trading News |
Stock Index
    |
   |
