Platinum Falls With Weak Catalytic Converter Demand

Platinum futures dropped to a five-year low and palladium declined to a five-month low on signs demand for the metals used in automobile catalytic converters is faltering.

A manufacturing gauge for Germany, once Europe’s export-led powerhouse economy, slid to 49.9 last month, the lowest level in 15 months, with new orders falling at the fastest pace since 2012. Japan’s auto sales declined 0.8 percent last month, industry figures showed today. Catalytic converters account for about 38 percent of platinum demand and 68 percent for palladium, according to Johnson Matthey Plc.

“German data today that showed disappointment might lead to lower car sales,” Daniel Briesemann, an analyst at Commerzbank AG in Frankfurt, said by phone today. “The Japanese automarket is predominantly gasoline driven so this should be weighing on palladium.”

Platinum for delivery in January declined 1.7 percent to $1,278 an ounce by 9:11a.m. on the New York Mercantile Exchange. The metal fell as much as 2.8 percent to $1,263.60 an ounce, the lowest for a most-active contract since Sept. 8, 2009. Palladium for December delivery dropped as much as 1.5 percent to $763.90 an ounce, the lowest since April 7.

Gold futures rose 0.1 percent to $1,213.30 an ounce on the Comex in New York.

via Bloomberg

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza