Platinum up on South African mine unrest, gold flat
By Frank Tang
NEW YORK (Reuters) - Platinum rose almost 3 percent on Wednesday, its biggest one-day rally in a month, boosted by supply fears after sprawling labor unrest halted production at some mines in top platinum producer South Africa.
Gold was up by just pennies, retreating after hitting a six-month high during the session. Some investors scaled back their bullish bets before a Federal Reserve decision on Thursday about new economic stimulus.
Machete-wielding strikers forced No. 1 platinum producer Anglo American Platinum (AMSJ.J: Quote) to shut down some South African operations, widening the labor unrest sweeping the country's mines. South Africa has 80 percent of the world's platinum reserve.
The price of platinum, mostly used as an autocatalyst to clean auto emissions, has soared 11 percent in the last eight sessions. The metal's relative strength index (RSI) rose above 80 on Wednesday to its most overbought level since early 2008.
"Platinum's rally is very strike-specific at this point, and it may pull back when the supply worries are over, as platinum is now getting significantly overdone," said Frank McGhee, head precious metals trader Integrated Brokerage Services LLC.
Spot platinum rose 2.8 percent to $1,644.74 an ounce by 2:10 p.m. EDT (1810 GMT), its biggest one-day percentage gain since August 16. Wednesday's high of $1,654.49 marked its best level in five months.
U.S. NYMEX October platinum futures settled up $42.60 at $1,649.60 an ounce, with volume almost double its 250-day average, preliminary Reuters data showed.
Palladium rose 1.6 percent to $676.47 an ounce. Continued...