Gold steady, PGM off multi-month high as stocks dip

By Chikako Mogi

TOKYO (BestGrowthStock) – Platinum group metals (PGM) slipped from their highest levels in about two years on Thursday as weakness in stocks prompted profit-taking on the metals, which have been supported by expectations for an economic recovery.

Gold held steady as investors were wary of fallout from fraud charges against Goldman Sachs Group Inc (GS.N: ), a leading commodities player, and concerns over Greece’s debt problems.

Weakness in global stock markets and a drop in commodities such as oil and copper have raised doubts about growth prospects and prompted investors to take profits from markets’ recent gains, some analysts said.

“Investors are turning their focus from U.S. corporate earnings to an overnight drop in copper and oil prices, as well as weakness in stock markets,” said Kazuhiko Saito, chief analyst at Tokyo’s Fujitomi Co Ltd.

“These developments raised concerns about the economic recovery, and along with the lingering Greece problems, are capping the market’s upside,” he said.

Assets which have been rising on expectations for a global economic recovery may face pressure in the near term from profit-taking, he said.

Spot gold was steady at $1,145.00 an ounce as of 0243 GMT, compared to late New York levels of $1,145.30.

U.S. gold futures for June delivery were down 0.2 percent at $1,146.20 per ounce compared to $1,148.80 an ounce on the COMEX division of the NYMEX.

Saito said he would be closely watching a speech by President Barack Obama later on Thursday for comments on U.S. regulations.

White House spokesman Robert Gibbs said on Wednesday that Obama will mention derivatives in his speech, though that would not be the focus of his remarks.

A German state bank said it had severed business ties with Goldman Sachs, citing U.S. regulators’ allegation that the dominant Wall Street bank committed fraud, while France eyed an investigation of its own.

Investment flows have paused, with holdings at the world’s largest gold-backed exchange-traded fund, the SPDR Gold Trust, staying at a record 1,141.041 tonnes as of April 21, unchanged since first hitting this level on April 9. (GOL/SPDR: )

Spot palladium eased 0.7 percent to $559.00 an ounce after rising 2 percent to a two-year high of $568 an ounce the day before, as strong Chinese import data boosted demand expectations.

Spot platinum was down 0.2 percent at $1,728.00 an ounce after rising to $1,737.50 an ounce on Wednesday, its highest since August 2008.

Platinum group metals (PGM) have been supported by expectations for economic recovery, helping boost demand for these metals, mostly used by the auto industry and jewelry sector, as well as by exchange-traded fund demand, particularly from the United States.

On the London Metal Exchange, benchmark copper for three-month delivery was lower on Thursday after closing down $30 at $7,760 a tonne the day before.

Oil prices fell closer to $83 a barrel on Thursday.

Asian stocks were down on Thursday, with the Nikkei average (.N225: ) falling 1.8 percent, as some market players suspected a weaker futures market had prompted trimming of long positions. (.T: )

U.S. stocks (Read more about the stock market today. ) finished little changed on Wednesday as disappointing outlooks from healthcare companies offset strong earnings from Morgan Stanley (MS.N: ) (Read more about the money market today. ) and Apple Inc (Read more about Apple stock future.) (AAPL.O: ). (.N: )

The euro remained pressured on Thursday after weakening broadly the previous day, falling for a fifth straight session against the dollar as investors fretted about delays in putting together a financial aid package for debt-stricken Greece.

Investment Research

(Editing by Michael Watson)

Gold steady, PGM off multi-month high as stocks dip