Precious Metals Give Up Gains As South African Reality Bites
London (June 25) Precious metals sold off Wednesday to roll back on somewhat surprising gains in the previous session.
Spot platinum lost 0.7% to trade at $1,452.75 a troy ounce, while palladium fell 0.6% to $821.65 an ounce, as miners returned to work in South Africa after a five-month strike.
The rollercoaster price reaction -- both metals actually rose Tuesday on news of the strike ending -- gave weight to the old adage of 'sell the rumor buy the fact,' said Marex Spectron head of precious metals David Govett.
"We saw both metals have a correction two weeks ago when rumors started surfacing that the strike was near its end and yesterday saw confirmation and in turn higher prices for both," he noted. "Overnight, the correction from the highs has continued with some good selling seen in Asia.
"I think we have probably seen the highs for the time being, in the absence of any fresh geopolitical problems," Mr. Govett said.
Gold and silver also scaled back their gains on Wednesday. Spot gold fell 0.4% to $1,313,64 per troy ounce, while silver drifted 0.1% down to $20.853 per ounce.
"The rally in both gold and silver was largely due to speculators closing out short positions rather than stronger physical demand," said ANZ bank in a note to clients. "The lack of follow-through means we may see [precious metal] prices soften towards the end of the week."