The strike, which began on Jan. 23 when 70,000 mineworkers downed tools, has hit about 40 percent of global platinum supply and around 37 percent of world palladium supply.
Gold up on Iraq & renewed Ukraine tensions
Gold prices rallied to a one-month high as the deteriorating situation in Iraq and renewed tensions over Russia and Ukraine strengthened the precious metal’s safe-haven investment appeal. Gold also was boosted after the U.S. Federal Reserve following a two-day meeting said on June 18 it would leave interest rates unchanged but would cut its monthly bond-buying program by another $10 billion to $35 billion amid an improving U.S. economy.
Gold for August delivery on Comex touched a session high of $1,317.20 an ounce at the time of writing on June 19, its strongest in over a month. The previous day August gold had settled at $1,272.70. Spot gold, meanwhile, was fixed at $1,293 an ounce in the pm fix in London on June 19.
Analysts say escalating violence in Iraq will continue to be bullish for gold.
Meanwhile, worries over Ukraine also have intensified again after pro-Russian separatists shot down a Ukrainian army transport plane last weekend, killing all 49 people on board.
Further adding to the tensions between Kiev and Moscow, Russia’s gas state-owned supply giant Gazprom halted gas supplies to Ukraine on June 16 after the latest round of talks between the European Commission, Kiev and Moscow broke down. According to Ukraine’s state company Naftogaz, Ukraine has enough reserves to last until December
Mixed trends for softs
Among soft commodities, cocoa futures edged higher to record fresh three-year highs on the ICE Futures U.S. exchange in New York, underpinned by industry buying and expectations of another year of global deficit. Cocoa for delivery on ICE in September reached $3,128 a tonne on June 18, its highest since August 2011, before settling at $3,116. ICE September cocoa had finished last week at $3,103. On London’s NYSE Liffe, July cocoa remained well supported, finishing at £1,975 a tonne at midweek, a tad up its June 13 close at £1,973.
Raw sugar bucked the downward trend of recent weeks, boosted by strong nearby physical demand. ICE July raw sugar touched 17.98 cents a pound on June 19, its highest since mid-May. The spot contract had settled at 17.49 cents the previous day, up from a 17.02 cents a pound finish at the end of last week.
Arabica coffee futures renewed their downtrend to hit a four-month low on renewed speculation that the damage to top producer and exporter Brazil’s 2014-2015 (April 1-March 31) crop now under harvest is not as extensive as had been feared. September arabica on ICE Futures U.S. touched $1.6658 cents a pound on June 19, its weakest since March, after settling at $1.6953 cents the previous day.
Last week, arabica had rallied to a reach a three-week high of $1.7952 on June 13 as the market fretted about the extent of the drought-damage to Brazil’s arabica crop. Traders expect the volatility in arabica futures to continue until a clearer picture of Brazil’s 2014-2015 crop emerges; this is not expected until later in the harvest.
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