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PRECIOUS-Brighter demand outlook powers platinum to six-year high

Published 2021-02-15, 05:31 a/m
© Reuters.

* Platinum unlikely to trade at a premium to gold -analyst

* Markets await U.S. Fed FOMC minutes on Wednesday

* Benchmark U.S. yields rose to 11-month high on Friday

* Interactive graphic tracking global spread of coronavirus: https://tmsnrt.rs/3mvcUoa (Add comments, graphic, updates prices)

By Nakul Iyer

Feb 15 (Reuters) - Platinum prices climbed to their highest level in over six years on Monday, buoyed by expectations of a wider supply-demand deficit for the industrial metal as investors bet on a swift global economic rebound.

Platinum XPT= , used in catalytic converters that limit emissions from automobile engine exhaust systems, rose 3.4% to $1,294.52 an ounce by 1245 GMT, having touched $1,304.00, its highest since September 2014.

"Investors have started to realize there's upside potential for platinum prices, so it's catching up to other precious metals," said ABN Amro analyst Georgette Boele, adding the industrial outlook has improved for platinum.

Platinum will likely continue to outperform both palladium and gold, but it is unlikely to revert back to trading at a premium to gold, she added.

Specialist materials firm Johnson Matthey (LON:JMAT) predicted a third consecutive annual deficit for platinum this year. also said longstanding supply issues of the metal in top producer South Africa could lend further support by potentially widening its supply deficit. gold XAU= edged 0.1% lower to $1,822.00 per ounce pressured by U.S. Treasury yields topping a near 11-month peak on Friday, and as global shares scaled a fresh record peak. MKTS/GLOB

U.S. gold futures GCv1 were little changed at $1,823.20.

"Gold's overall technical position remains fragile, and will come under renewed downward pressure this week, if U.S. yields continue moving higher," OANDA senior market analyst Jeffrey Halley said in a note.

Higher yields increase non-yielding bullion's opportunity cost.

Investors are looking to stocks for quick gains and with such strong "risk-on" moves, it's difficult to see gold rallying, said ActivTrades chief analyst Carlo Alberto De Casa, adding a drop below $1,790 could trigger further declines.

Market participants await minutes of the U.S. Federal Reserve's Federal Open Market Committee meeting at the end of January, due on Wednesday.

Spot silver XAG= rose 1.1% to $27.65 per ounce and spot palladium XPD= rose 0.8% to $2,408.44.

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