(Recasts, adds analyst comments, closing prices, adds NEW YORK
to dateline)
By Frank Tang and Atul Prakash
NEW YORK/LONDON, May 9 (Reuters) - Platinum ended sharply
higher on Friday as the launch of U.S. platinum exchange-traded
notes boosted sentiment, while gold also finished up on record
crude oil prices.
Investment bank UBS <UBSN.VX> launched two ETNs offering
long and short trading strategies in platinum. ETNs, unlike
exchange-traded funds, do not purchase physical platinum to back
the number of shares sold. []
The two ETNs -- UBS E-Tracs Long Platinum ETN <PTM.P> and
UBS E-Tracs Short Platinum ETN <PTD.P> -- started trading on
Friday on the NYSE Arca platform.
"It won't have an impact on the availability of physical
metal nor on lease rates. Fundamentally you cannot justify the
kind of price move we have seen," said Tom Kendall, metals
strategist at Mitsubishi Corporation.
But it offers another route by which U.S. mutual and pension
funds, which cannot directly invest in commodity derivatives,
can gain exposure to platinum, he added.
Spot platinum <XPT=> rose to a high of $2,095 an ounce and
was last at $2,074/2,094 by New York's last quote at 2:15 p.m.
EDT (1815 GMT), compared with $2,008.50/2,028.50 in New York
late on Thursday.
U.S. July platinum contract <PLN8> on the New York
Mercantile Exchange ended up $59.50, or 2.9 percent, at
$2,101.80 an ounce.
Ralph D'Esposito, COMEX floor trader at RJ Futures in New
York, said the ETN news gave platinum an additional boost this
week, and he also cited strong support from the physical
platinum market and robust buying by the trades.
Dealers also reported platinum purchases in Japan and Europe
as auto makers stocked up for their second-quarter requirements,
but the metal was still more than $200 below a lifetime high of
$2,290 an ounce hit on March 4.
"People just read about the new products and started buying
platinum, but I think it's overdone here," said Wolfgang
Wrzesniok-Rossbach, head of marketing and sales at Heraeus, a
German precious metals trading group.
TOKYO FUTURES SURGE
Platinum's major industrial use is in making autocatalysts,
particularly diesel catalysts, as it helps clean environmentally
damaging fumes from exhausts. It is also used in jewellery.
"While the UBS ETNs do not directly invest in the
underlying, the reality is that the market makers of the product
need to hedge their short exposure to investors who are very
likely to be long given the bullish medium term outlook," J.P.
Morgan said in a report.
"As such we can expect that investors and market makers will
continue to be net buyers of platinum."
In other markets, the most active Tokyo platinum contract
jumped by the daily 300 yen limit. The benchmark contract for
April 2009 delivery <0#JPL:> rallied to 6,703 yen per gram, but
still below a record of 7,427 yen hit on March 6.
Spot gold <XAU=> hit a one-week high of $889.80 an ounce on
a weaker dollar and record-high oil prices, but slipped as oil
retreated. The metal was last quoted at $886.30/888.30 at 2:15
p.m., against $881.40/882.60 in New York late on Thursday.
"We know something is wrong. Is gold too cheap or is oil too
expensive? One of the two is true. I would think that oil is
driving everything, really," said Leonard Kaplan, president of
Prospector Asset Management at Evanston, Illinois.
In the physical market, steady purchases from jewellers in
Indonesia, Thailand and Vietnam pushed up premiums for gold bars
to 80 U.S. cents an ounce to the spot London prices in
Singapore, from 75 cents last week <GOLD/ASIA1>.
In other precious metals, gold futures for June delivery
<GCM8> on the COMEX division of the New York Mercantile Exchange
settled up 3.70 at $885.80 an ounce.
Silver <XAG=> fell to $16.80/16.86 from $16.85/16.91 an
ounce, while spot palladium <XPD=> was up at $439/447 an ounce,
higher than its Thursday close of 430.50/438.50 an ounce.
(Editing by Matthew Lewis)
