Platinum, silver sink on China growth concerns

PLATINUM sank to a onemonth low and silver retreated on concern slowing growth in China will reduce demand for the precious metals.

The Shanghai composite index slumped the most in three weeks as data over the weekend added to concern the economic slowdown is deepening and traders gauged the level of state support for equities. Industrial output missed economists’ forecasts, while investment in the first eight months increased at the slowest pace since 2000.

“The problem with platinum and silver, distinct from gold, is the weakness in China,” Neil Meader, a precious metals consultant at Metallis Consulting in London, said. “If you see such worry over one of the key sources of demand, you’re bound to see prices decline.”

Platinum for immediate delivery slid for a fourth day, the longest run in a month. The precious metal was 1.1 percent lower at $959.42 (R12 968.80) an ounce as of 12.20pm in London. Silver and palladium also dropped. Silver is widely used in solar panels, while platinum and palladium are often found in industrial machinery and pollution-control devices for vehicles.

Gold traded near a onemonth low on light volumes before the Federal Reserve’s interest rate decision later this week. The trading volume was 41 percent below the 100-day average for the time of day on the Comex in New York.

“Gold seems to have priced in a December, rather than a September, US interest rate rise,” David Wilson, an analyst at Citigroup in London, said. “If the market sees a surprise hike on Thursday, gold could be sent tumbling.”

Holdings in global exchange traded products backed by bullion dropped for six days through Friday and were the lowest in three weeks, according to fund data. – Bloomberg