Forex

maheshkarnam · #1 (**permalink**) 07-30-2008, 03:24 AM

Among other precious metals, platinum steadied after a second week of decline.

The metal has been pressured by fears over weakening demand as the US and global economic outlook darkened and amid speculation over the financial health of carmakers in the US and Japan.
Platinum is widely used by the car industry in autocatalysts and any sign of a slowdown in the automotive sector could hit demand for the metal hard.

Supply fears linked to a power shortage in South Africa also eased after the country's state power utility Eskom said it sees no further power cuts this year.

The world's top platinum producer AngloPlatinum said on Monday it will meet its annual production target of 2.40 million ounces -- against 2.47 million last year -- and expects output to increase significantly in the second half.

Investment bank JP Morgan on Monday cut its 2008 price target for platinum to $1,885 an ounce from $2,156, and for 2009 to $1,650 from $1,981, citing worsening economic conditions.

Michael Jansen, an analyst at the bank, said in a note that it appears South Africa's major mining companies are "now coping quite successfully with the power situation."

Spot platinum ended higher at $1,763.00/1,783.00 against $1,745.00/1,765.00 late in New York on Friday.

Spot palladium rose to $385.50/393.50 an ounce from $380.50/388.50 late in New York.
Jansen added however that "palladium demand is weaker than platinum demand due to the downsizing taking place in term of new vehicle purchases in the US right now."

"Hence, while we are short term bearish platinum - looking for a move down towards $1,500 over the next nine months - the outlook for palladium is not a great deal better," he added.

Silver was also higher at $17.46/17.52 an ounce from $17.35/17.43 late in New York on Friday.

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