Platinum at 10-month high on supply worries

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PlatinumJewellery REUTERS A saleswoman displays platinum rings.

New York/London - Platinum rose to a 10-month high above $1,500 an ounce on Tuesday, boosted by new positioning by funds at the start of the quarter and long-term supply worries despite the end of South Africa's mining strike.

Gold reversed gains as investors took profits after strong exchange-traded fund buying sent prices to a near two-month peak earlier, a day after data showed US gold coin sales rose to a five-month high in June on heightened geopolitical tensions.

On Tuesday, members of South Africa's largest union NUMSA said members could down tools in a wildcat strike at state-power

utility Eskom, while more than 220,000 South African engineering and metal workers launched a strike.

“It is the uncertainty over possible restructuring, combined with how quickly the industry can gear up production that will influence prices over the summer,” said James Steel, HSBC's chief precious metals analyst.

Spot platinum hit its highest since September at $1,511 an ounce and was up 1.5 percent at $1,503.50 an ounce by 2:54 p.m. EDT (20:54 SA time).

The NYMEX platinum contract for October delivery settled up $32.10 at $1,515 an ounce.

Spot palladium was up 1.2 percent at $850.33 an ounce.

Fears of further labor unrest continued to support platinum group metal (PGM) prices.

Last week, the world's biggest platinum producers said they must restructure operations after reaching a wage settlement with miners.

Also underpinning PGM prices are demand hopes after major automakers reported better-than-expected US sales in June.

Bill O'Neill, partner of commodities investment firm LOGIC Advisors, said new money flows on the first day of the third quarter helped PGM prices.

Among other precious metals, spot gold inched up 51 cents to $1,327.70, having earlier hit a three-month high at $1,332.10 an ounce.

US COMEX gold futures for August delivery settled up $4.60 an ounce at $1,326.60.

The world's largest gold exchange-traded fund SPDR Gold Shares reported a 5.7 tonne inflow on Monday, the biggest one-day change it has reported in its holdings since March 10.

In the retail gold market, private-investor sentiment towards the metal in June fell to its lowest level since February 2010 following a sharp rally in gold prices earlier in the month, said a survey by online precious metals market BullionVault.

The Gold Investor Index, which measures the balance of customers adding to gold holdings over those reducing them, dropped to 51.2 in June from 52.4 in May.

A reading of 50 signals an equal number of net gold buyers and sellers.

Silver was up 0.5 percent at $21.07 an ounce. - Reuters



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