Platinum posted a second strong week of gains, up 5 percent, and is up nearly 9 percent this month after an outbreak of violence at a platinum mine in South Africa left 44 people dead. The African nation supplies about 80 percent of the world’s platinum.
Bullion was up 3.4 percent on the week, its biggest weekly gain since the last week of January, spurred by minutes of the U.S. Federal Reserve’s August meeting released Wednesday which showed policymakers were ready to deliver more stimulus “fairly soon” unless the economy improves considerably.
A new round of quantitative easing — printing money to buy government bonds to keep long-term interest rates low — fueled fears of inflation further down the track. The first two rounds of U.S. quantitative easing have fuelled a doubling of gold prices in the last four years.
The news lifted gold out of the near $100 range it had held since mid-May and above its 200-day moving average for the first time since March. However, gold’s relative strength index suggests the market might be slightly overbought following a seven-session rally that was snapped on Friday. “Gold has this week broken out of its well-defined, multimonth downward trendline. That resistance which kept gold in a range in the last several months should become a new level of support, suggesting gold is not going down but going higher,” said Adam Sarhan, CEO of Sarhan Capital.
Spot gold was down 3 cents at $1,670.01 an ounce by 2:22 p.m. EDT (1822 GMT). It hit $1,674.80 on Thursday, its highest price since April.
U.S. gold for December delivery settled down 10 cents at $1,672.90 an ounce. Trading volume was about 35 percent below its 30-day average, preliminary Reuters data showed. Holdings of gold exchange-traded funds, which issue securities backed by physical metal, hit a record 71.253 million ounces, Reuters data showed on Friday.
“The perception that the Fed is closer to QE than any time since this time last year has helped drive gold higher. The preservation-of-capital type money managers will likely find gold more attractive now than they had any time in the past four months when price had been stuck in a range,” said Carlos Perez-Santalla, trader at PVM Futures. Other precious metals retreated along with gold, with platinum up 0.5 percent at $1,545.49 an ounce, off Thursday’s near four-month high of $1,558.49 an ounce.
World No. 1 platinum producer Anglo American Platinum () said on Friday 100 workers had refused to go underground at its Thembelani mine in South Africa, a sign that simmering discontent in the sector has not been contained. Silver was up 0.4 percent at $30.64 an ounce, while spot palladium slid 0.2 percent to $648.47 an ounce.
