Past posts on platinum
Platinum reached an almost 10-month high on signs increased demand from car companies will add to a supply shortage. Gold held below the highest in three months.
Investor holdings in platinum- and palladium-backed funds are at or near records as demand from automakers and a South African mining strike that lasted five months leads to a third successive supply deficit. U.S. auto sales adjusting for seasonal trends accelerated to an annualized pace of 16.98 million in June, the fastest in almost eight years, researcher Autodata Corp. said yesterday.
About 220,000 members of the National Union of Metalworkers of South Africa stopped work yesterday to support their request for pay increases. The protests come after a platinum strike that lasted from January to June. The country is the largest producer of the metal, which is mainly used alongside palladium in car pollution-control devices.
“Investors acknowledge the difficulties that the South African platinum sector faces beyond the resolution,” UBS AG analysts wrote in a report today. “Participants will be keeping an eye out for any signs of tightness in the months ahead.”
Platinum for immediate delivery rose 0.5 percent to $1,516.63 an ounce by 11:28 a.m. in London, according to Bloomberg generic pricing. It reached $1,519.38, the highest since Sept. 4. The metal for October delivery added 0.3 percent to $1,518.90 on the New York Mercantile Exchange.
Wednesday, July 2, 2014
With India's gold imports having pressured its current account deficit (CAD), two large Indian public sector banks have suggested that there is a greater need to make use of gold available in the country, and that the precious metal should be made more liquid. A government official has seconded the move, laying bare some aspects of the government's intention to monetise the gold stores held in most households across the country.
The State Bank of India (SBI) and Bank of Baroda have maintained that a portion of the gold deposits held by banks, should be treated as part of the mandatory cash reserve ratio (CRR) or statutory liquidity ratio (SLR).
CRR is part of the deposits that banks park with the central bank, the Reserve Bank of India. It earns no interest, and is currently at 4%, while the SLR, at 22.5%, is the part of deposits that must be invested in recognised securities and assets.
Normally, banks tend to make treasury play a source of boosting bottom lines, when there is poor growth in advances or when bad loans tend to rise. Bankers now want to use these gold deposits.
Government official, the Union financial services secretary GS Sandhu, said the government is actively looking into the issue of monetising gold, following representations from the banking sector.
Sandhu stressed the need to monetise gold held by the public to help reduce imports of the yellow metal, which are a drain on the nation’s foreign exchange resources, and leads to a wider CAD.
"So much gold is lying idle (within the country). In some ways if we can monetise this, maybe our imports will come down drastically. Something in that direction will have to be thought of," said Sandhu, at an event organised by the Gems and Jewellery Export Promotion Council in Mumbai on Saturday.
"Gold is after all a store of value. Is it possible for the regulator to treat a bit of our gold deposits as CRR or SLR, instead of cash or government securities?", asked SBI Chairperson Arundhati Bhattacharya. She was speaking at the same event.
She added that given the current situation, there was a "greater need to make use of gold available in the country, and make it more liquid."