ETFS Physical Platinum (PPLT) is designed to offer investors a simple, cost-efficient and secure way to access the precious metals market. PPLT is intended to provide investors with a return equivalent to movements in the platinum spot price less fees.
See more details on sponsor's website
Platinum mining in South Africa has plunged by more than a third since workers went on strike in January to demand higher pay; mining companies had built up their inventories before the strike, but stockpiles have dwindled as the strike reaches its 11th week.
South Africa is the source of roughly 80% of the world's platinum, while Russia is the second largest producer; platinum is used primarily in catalytic converters of diesel-burning vehicles, which are common in Europe.
Metals continue to lead the way down in commodities following the FOMC results and Yellen press conference. Unless something happens to change the Fed's mind, QE will end this fall and rate hikes are starting about one year from today.
Gold -1.4% to $1,322 per ounce - as recently as Monday, the metal was challenging $1,400. Silver -2.6% to $20.28. Copper -2.2% to $2.92 per pound. Platinum -1% to $1,437 per ounce. Palladium -2.1% to $752. WTI crude oil slips another 0.4% to $98.76.
Gold's retreat over the last couple of sessions has wiped out all of March's gain.
Talks resumed today between South Africa's top mineworkers union and the world's top three platinum producers, but with few hopes for a quick resolution to a strike that hit production of the metal given AMCU's uncompromising approach to negotiations and with the two sides far apart over wages.
The delegations for the talks were low level, with no ministers or chief executives from Anglo American Platinum (AGPPY), Impala Platinum (IMPUY, IMPUF) or Lonmin (LNMIF, LNMIY), and without the president of the AMCU union.
South Africa's Association of Mineworkers & Construction Union has started government-brokered pay talks with the world's three largest platinum producers in order to end a strike of up to 100,000 workers.
The strike, which is affecting over half of the world's platinum output, is in its second day and is threatening to turn violent.
The meeting marks the first time that the AMCU has met with Anglo American Platinum (AGPPY), Impala Platinum (IMPUY, IMPUF) and Lonmin (LNMIF, LNMIY) under one roof.
Tens of thousands of platinum workers in South Africa went on strike today to demand higher salaries, and Anglo American Platinum (AGPPY), Impala Platinum (IMPUY, IMPUF) and Lonmin (LNMIF, LNMIY) say mining operations had mostly stopped as a result.
The companies warn that the industry is in a financially fragile state and a new strike will be damaging to both revenue and jobs; this week, Amplats said earnings in 2013 returned to a profit after a loss the previous year but a strike could reverse those gains.
Anglo American Platinum (AGPPY) returned to a profit in 2013 as the platinum sector tentatively picked up after enduring a wave of violent strikes, but the recovery risks being jeopardized by new unrest as miners prepare to lay down tools tomorrow to demand a doubling of their basic salary
Amplats, majority-owned by Anglo American (AAUKY, AAUKF), expects EPS to increase to 480-590 cents from a loss the year before, amid higher sales of platinum and a favorable rand/dollar exchange rate.
Amplats joins Impala (IMPUY, IMPUF) and Lonmin (LNMIF, LNMIY) in warning of the potential damage of a prolonged strike, saying the miners' demands are “unaffordable and unrealistic."
'The gold market is lacking enthusiasm and interest," say UBS's Edel Tully and Joni Teves, noting the metal's failure to respond to the weak payroll data last week. "With hopes of an upside break now dashed, collective sentiment is firmly back in the bearish camp."
The two extrapolate gold's sour mood to platinum: "The early-2014 price rally has now become stale. Platinum seems to be running out of steam around these levels, and spillover weakness from gold would be enough for platinum to give in to the downside from here."
The morning after: Stock index futures are about flat after yesterday's post Fed, post-taper initiation moonshot.
Europe's ahead around 1.5% and the Nikkei gained 1.7% overnight, though Shanghai and Hong Kong each fell about 1%.
The 10-year Treasury yield remains near its highest level of the year at 2.9%, and precious metals - which fell following the Fed announcement - accelerate that decline. Gold is off 2.4% to $1,205 per ounce. Silver - 3.7% to $19.33.
The 10-year Treasury yield jumps to 2.92% following the jobs numbers beat and the far bigger-than-expected dip in the unemployment rate to just 7%. The government shutdown apparently affected this month's speed of decline in the UE rate, but not the level - i.e., it would be at 7% no matter the shutdown, but the furlough and then return of workers caused all of the decline to occur in the November report.
Stock index futures remain about where they were, the S&P 500 (SPY) +0.5%.
Gold (GLD) is off 1.25% to $1,216 per ounce and the dollar jumps, with UUP +0.5% premarket.
Threatening to sink below $1,200 ounce after the strong ADP jobs report this morning, gold has staged a big reversal to $1,247. Below $19 earlier, silver has also come along for the ride, now at $19.72.
The "struggle for gold not only rests with the predominant selling interest among investors currently, but with limited positive catalysts looking forward, gold is unlikely to regain its former appeal," writes UBS, slashing its precious metals forecasts for 2014 - gold to $1,200 from $1,325 and silver to $21 from $24.
With the downward momentum building, gold could test $1,050 an ounce - a level that might approach a "decent buying level," writes the team, but the path would be "very turbulent."
Gold is flat in morning action at $1,223 after yesterday's plunge, while silver has given up a bit more ground, -0.5% to $19.93.
November's PMI read of 57.3 is up from 56.4 last month, and the highest print this year. Leading is a 3 point gain in New Orders to 63.6 and a 2 point gain in Production to 62.8. Supplier Deliveries curiously fell 1.5 points to 53.2 (drones?).
Thousands of mineworkers at Anglo American Platinum (AGPPY.PK) have returned to work after staging a wildcat strike since Sunday at two mines in South Africa, the company says. Workers were demanding the reinstatement of 19 union leaders who had been suspended following an illegal sit-in last month.
Platinum prices surge as thousands of Amplats mineworkers in South Africa launch a wildcat strike overnight. The country accounts for ~75% of the global platinum supply and has been dogged by labor disputes in the past year. Taking advantage may be Stillwater Mining (SWC +3%), which operates a platinum recycling plant that should help it meet platinum demand without having to produce more.
Jubilee Platinum (JUBPF.PK) is selling down its stake in its ferroalloy subsidiary Jubilee Smelting and Refining, for $14M to Global Renewable Energy. The first tranche of the sale includes 65% of ferroalloy group JSR and 40% of power generator PowerAlt. Jubilee, which is in the process of buying Platinum Australia (now scheduled for June 10), intends to use sale proceeds to focus on its core metal. (Platinum ETFs: PLTM, PPLT)