JOHANNESBURG: Precious metals declined, with platinum heading for a seventh week of losses, the longest run since 2013, and palladium set to record the worst week since May.
Investors are losing interest in the metals on concern the popularity of electric cars, which use less platinum and palladium than gasoline-fuelled vehicles, will cut into demand, according to John Meyer, an analyst at SP Angel Corporate Finance LLP. The strengthening dollar also weighed on prices and investors pared holdings of exchange-traded funds backed by gold.
Platinum for immediate delivery slid 1.4 per cent to $1,017.42 (Dh3,736) an ounce as of 11.54am in London. The metal sank 4.2 per cent this week. Palladium retreated 0.7 per cent on Friday, bringing its weekly loss to 3.4 per cent.
“You don’t want to hold any surplus platinum right now,” said Meyer in an interview from London. “Electric vehicles are going to eat into and erode that market.”
Both metals are used in catalytic converters, which reduce car emissions, and posted big rallies earlier in the year as investors piled into precious metals amid speculation that the Federal Reserve will hold off on raising interest rates. The Fed and Bank of Japan are scheduled to hold policy meetings on Wednesday.
“Expect more volatility for precious metals as we inch nearer to the Fed and BOJ meetings next week,” Brian Lan, managing director of Singapore-based GoldSilver Central Pte, said in an email.
Gold slipped 0.2 per cent to $1,312.21 an ounce. Silver dropped 0.4 per cent to $18.9015 an ounce. For the week, prices slid 1.2 per cent and 0.8 per cent, respectively.
The dollar, which often trades inversely to gold, climbed 0.4 per cent this week against a basket of major currencies.
Holdings in bullion-backed exchange-traded funds declined 4.3 metric tons to 2,014.6 tons on Thursday, the lowest level since July 29, data compiled by Bloomberg show.