Gold Firm, Silver Rallies, Platinum Stays Near 2 Month High

August 21, 2012 at 09:53

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Gold was trading near the top of its range since May on Tuesday, with sentiment supported by expectations for further stimulus measures, despite the European Central Bank’s effort to quash speculation on its future bond buying programme.

“Ongoing expectations for further monetary easing globally are keeping gold lifted,” said Li Ning, an analyst at Shanghai CIFCO Futures.

“Physical demand is likely to pick up in September, and that gives hope to gold bugs too.”

Spot silver jumped nearly 3 percent on Monday to a two-month high of $28.84, surprising traders and analysts. The move, helped by the rally in platinum prices, was the sharpest one-day rise in more than a month and pushed silver above its 100-day moving average for the first time since April.

Silver, with dual properties as both precious and industrial metal, was trading at $28.78

“I think everyone is waiting for some action between September and December after a few months of directionless trade,” said a Shanghai-based trader.

“If we see policymakers announce stimulus measures, and these measures meet expectations, prices will rally. If not, prices will retrace.”

Platinum on Tuesday hovered just below a two-month peak hit in the previous session as concerns over supply from top producer South Africa festered, while gold firmed on expectations for further monetary stimulus.

Lonmin, the world’s third-largest platinum producer, conceded that sacking 3,000 workers at its Marikana mine could lead to more violence, after deadly clashes last week killed dozens.

The gold-platinum spread stood at $137 an ounce, after falling below $130 the session before, its narrowest since early July.