Investment on precious metals are reducing

Tag : metal supplies
Platinum fell to its lowest level since early May with hopes forstronger supplies out of South Africa weighing on prices.
Spot gold hit a day low of $954.90 an ounce, before recovering to$961.80/962.80 at 1229 GMT from $963.10/964.10 in late New Yorktrades on Wednesday. It hit a four-month high of $987.75 an ounceon Tuesday.
"We've seen a bit of a bounce in the dollar, oil prices areconsolidating while equities are stronger," said Barclays (nyse: BCS - news - people ) Capital analyst Suki Cooper. She added, however, that inflationconcerns and ongoing instability in financial markets were keepinggold well supported.
Bank stocks in the United States and Europe have recovered over thepast couple of days, but analysts say many investors remainconcerned about financial risks.
"The longer-term trend for gold is still intact," said Merril Lynchanalyst Daniel Hynes.
"Prices fell yesterday due to oil and better equity performance,but there is still a lot of insecurity over the U.S. banking sectorwhich has driven investors back into gold."
Gold is used as an alternative to stocks during times of financialuncertainty.
Dollar weakness has been boosting gold recently, as investors lookto hedge against weakness in the U.S. currency.
The dollar firmed on Thursday after banking stocks rallied inresponse to better-than-expected results from U.S. bank JPMorgan.
A report sovereign wealth funds have been cutting back on dollarexposure has kept gains in check for the U.S. currency, whichremains within two cents of its all-time low against the euro.
Lower oil prices have been pressuring gold in recent sessions, withcrude now more than $13 a barrel of all-time highs seen last week,reducing the precious metal's appeal as a hedge against fuel-ledinflation.
Platinum fell to its lowest level in over two months after SouthAfrican state-owned power utility Eskom said it was confident thecountry would go through the winter months without power cuts.
Energy shortages in the world's number one platinum producer haveboosted prices this year due to concerns mine output would beconstrained.
"We have become somewhat concerned about the short to medium termview for the platinum group metals," JPMorgan said in a note. "Apullback towards $1800 an ounce in platinum looks likely in themedium term, while palladium looks like it could trade towards $400an ounce."
Spot-platinum was trading at $1,889.00/1,909.00 from$1,919.00/1,939.00, having earlier sunk to a low of $1,892. Sistermetal palladium fell to $424.50/$432.50 from $430.50/438.50.
Silver was steady at 18.71/18.77 from $18.71/18.80.
(Editing by Christopher Johnson) Copyright 2008 Reuters, Click for Restriction
Gold Still Shines
Oil, Gold Fly On Weak Data