Ascendant dollar adds to metal woes

PLATINUM fell to a six-year low and palladium reached the lowest since 2012 yesterday on speculation that supplies are ample amid slowing demand from China. Gold was little changed.

BMW said yesterday it had reduced production by 16,000 cars in China and slowing sales might lead it to revise profitability goals.

The country accounts for at least 23% of global demand for platinum and palladium, which are used mainly in catalytic converters, Johnson Matthey estimates.

Commodities have slumped as China’s economy expands at the slowest pace in 25 years, leading to gluts in everything from metals to crops.

Platinum mine production is rebounding in top producer SA after a five-month strike last year.

Faith in precious metals has soured as the US Federal Reserve prepares to raise interest rates, cutting the allure of investments that do not give returns like other assets such as equities and bonds.

“What is missing right now is a significant element of demand from China,” Jonathan Butler, a precious-metals strategist at Mitsubishi in London, said.

“If miners sell as much metal in the second half of the year as they did in the first, prices could be under more pressure.”

Platinum for October delivery lost 1.1% to $956.30/oz yesterday on the New York Mercantile Exchange.

The metal had earlier declined as much as 2.2% to the lowest since January 2009.

Palladium futures were down 1.4% at $594.75/oz.

Gold futures were little changed at $1,090.60/oz on the Comex in New York.

They reached a five-year low on July 24. Investors bought bullion through exchangetraded products for the first time since mid-July, increasing holdings by 0.2 tonnes to 1,523.6 tonnes.

Silver was little changed at $14.51/oz in New York.

Angst over China’s slowing economy and concern over supply gluts have reverberated through the commodities market, with the ascendant dollar helping to send a gauge of prices to a 13-year low.

China announced measures to prevent borrowed shares being sold and bought back on the same day, the latest effort to halt an almost $4-trillion selloff.

“Renewed Chinese growth concern is driving commodities and stock prices lower,” Matthew Sherwood, the head of investment strategy at Perpetual, wrote in an e-mail to clients.

What is missing right now is a significant element of demand from China