(ADVISORY: There are no London Bullion Market Association
price fixings on Monday due to the U.K. Easter holiday break.
Normal coverage will resume on Tuesday)
* Palladium soars on physical buying, U.S. ETF demand
* Platinum highest since August 2008 on supply concern
* Better risk appetite, Wall St gains boost gold
* Coming Up: FOMC minutes release on Wednesday
(Recasts; adds comments, updates prices, changes dateline from
SINGAPORE)
By Frank Tang
NEW YORK, April 5 (Reuters) - Palladium prices hit a
two-year high on Monday, with physical buying due to strong
industrial and investment demand also boosting sister metal
platinum to its highest level since August 2008.
A lower dollar against major currencies amid higher risk
appetite also bolstered asset classes across the board from
equities to gold and crude oil, which rose above $86 a barrel.
Sharp inflows into the first U.S. platinum and palladium
exchange-traded funds and optimism about the auto industry's
recovery have spurred buying of platinum group metals.
"There is strong investment demand in the U.S. because of
the platinum and palladium ETFs, and the recovery in the auto
sector, particularly in the very strong developing markets,
such as China, has led to a pick-up in demand," said Carlos
Sanchez, precious metals analyst at commodities consultancy CPM
Group.
Palladium <XPD=>, used largely in the auto industry for
catalytic converters, rose to $496.50 an ounce, its strongest
price since March 2008. It was at $495 an ounce at 10:52 a.m.
EDT (1452 GMT), up from $490 late in New York in the previous
session.
U.S. auto sales jumped to a seven-month high in March, led
by a 41 percent surge at Toyota Motor Corp <7203.T> after the
Japanese automaker offered the steepest discounts in its
history to win back sales lost during its recent safety crisis.
[]
"We are seeing strong demand for palladium from the
industrial sector in Japan. There's also buying in platinum,
but it's not that strong," said a physical dealer in Tokyo.
More than half of the world's output of platinum group
metals is used in catalytic converters to clean the exhaust
fumes of vehicles.
Palladium and platinum prices began to rally in January
after ETF Securities Ltd launched the first U.S. PGM exchange
traded funds, which now hold about 900,000 ounces of the
combined metals.
PLATINUM-GOLD LINK WEAKENS
Gains on Wall Street after optimistic economic data,
including pending home sales and U.S. services sector data in
March, fueled investment sentiment in the gold market.
Spot gold <XAU=> was at $1,128.40 an ounce, compared with
$1,124.50 quoted late in New York on Friday.
U.S. June gold futures <GCM0> were up $3.80 at $1,129.90 an
ounce.
The New York market, which was closed on Friday, reopened
on Monday after the Easter weekend, while the U.K. and some
European markets were shut on Friday and Monday for a holiday
break.
In other precious metals, platinum was underpinned by
worries about supplies due to rising cash costs and production
interruptions in South Africa, the world's largest producer of
the metal, Sanchez said.
Platinum started to diverge from gold in January, after
showing a strong correlation with gold prices in the last
quarter of 2009.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
For a graphic of the correlation between gold and platinum:
http://graphics.thomsonreuters.com/gfx/LP__20100504150446.jpg
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
Platinum <XPT=> was at $1,688 an ounce, compared with
$1,668.50 late in New York on Friday, while silver <XAG=>
firmed to $17.95 an ounce, up from $17.86.
Palladium and platinum ended the first quarter 17 percent
and 12 percent higher, respectively, surpassing the
single-digit gains posted by gold and silver.
Prices at 10:55 a.m. EDT (1455 GMT)
Last Change Pct 2009 YTD
Chg Close % Chg
US gold <GCM0> 1129.30 3.20 0.3 1096.20 3.0
US silver <SIK0> 18.010 0.120 0.7 16.845 6.9
US platinum <PLN0> 1697.00 21.40 1.3 1471 15.4
US palladium <PAM0> 498.45 7.10 1.4 408.85 21.9
Gold <XAU=> 1128.55 4.05 0.4 1096.35 2.9
Silver <XAG=> 17.98 0.12 0.7 16.84 6.8
Platinum <XPT=> 1688.50 20.00 1.2 1465.50 15.2
Palladium <XPD=> 496.00 6.00 1.2 405.50 22.3
Gold Fix <XAUFIX=> 1123.50 7.50 0.7 1104 1.8
Silver Fix <XAGFIX=> 17.69 19.00 1.1 16.99 4.1
Platinum Fix <XPTFIX=> 1660.00 1.00 0.1 1466 13.2
Palladium Fix <XPDFIX=> 491.00 2.00 0.4 402 22.1
(Additional reporting by Lewa Pardomuan in Singapore; Editing
by Walter Bagley)
