Platinum slides as miners accept labor deal, gold up
By Frank Tang
NEW YORK (Reuters) - Platinum fell 2 percent on Tuesday following news that striking platinum miners at South Africa's Lonmin (LONJ.J: Quote) mine accepted a pay offer that could have them returning to work on Thursday.
After trading mostly higher early in the session, the metal suddenly nose-dived over $50, or 3 percent, within 10 minutes in response to news of the agreement at Lonmin's Marikana mine.
The metal, mostly consumed as an autocatalyst, posted its largest two-day decline since March, as No. 1 producer Anglo American Platinum (AMSJ.J: Quote) also said it had resumed operations in the strike-hit Rustenburg area.
The fast-moving and somewhat unexpected news from South Africa, which holds more than 80 percent of the world's platinum reserves, pushed gold off its high and left bullion up slightly on the day.
"It takes out the premium because of a shortage caused by an immediate strike," said Frank McGhee, head precious metals trader at Integrated Brokerage Services LLC.
"The rally in platinum may be over now, at least for a while," he added.
Prior to the decline that started on Monday, platinum had rallied about 24 percent after a deadly August clash between Lonmin miners and police at the Marikana mine stoked supply worries.
Spot platinum dropped 2.2 percent to $1,623.75 an ounce by 2:32 p.m. EDT on Tuesday, having lost nearly 4.5 percent in the past two days. Continued...