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PRECIOUS-Platinum hits 6-year peak; gold gains as dollar stumbles

Published 10/02/2021, 08:58 pm
Updated 11/02/2021, 12:12 am
© Reuters.
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* China's auto sales surged 30% in Jan

* Dollar index at two-week low

* U.S. Fed Chair speech at 1900 GMT, CPI data at 1330 GMT (Adds comments, updates prices)

By Nakul Iyer

Feb 10 (Reuters) - Platinum prices rallied to their highest in six years on Wednesday as economic recovery hopes boosted demand for the auto-catalyst metal, while U.S. stimulus expectations and a softer dollar supported gold.

Platinum XPT= rose 4.2% to $1,224.46 as of 1257 GMT, having earlier hit its highest since February 2015 at $1,234.35.

"Platinum's fundamentals are attractive with the metal being in a deficit for some years," said Ross Norman, an independent analyst, forecasting the industrial metal to average $1,316 an ounce this year.

Norman added that there are risks to the upside from potential supply issues in South Africa, which faces chronic shortage of electricity that mines need to produce the metal.

Analysts noted last month's 30% year-on-year surge in auto sales in China, the world's biggest market, stoked demand for platinum in automobile catalytic converters that are designed to limit exhaust fumes. gold XAU= meanwhile was up 0.1% to $1,837.96 per ounce by 1257 GMT, while U.S. gold futures GCv1 gained 0.2% to $1,838.40.

The dollar .DXY dropped to a two-week low against rivals on Wednesday. USD/

"Inflation fears are emerging, especially in the U.S with the stimulus intended to pass...(Fears are) that this would be too much and spark inflation going forward," said Quantitative Commodity Research analyst Peter Fertig.

The U.S. Congress is expected to pass a $1.9 trillion coronavirus relief bill, with President Joe Biden saying he had been in touch with Republican leaders who opposed the size of the package. prospects were further aided by a budget outline approved by the Democrats last week allowing them to pass the package without Republican support.

Market participants awaited U.S. January Consumer Price Index data due at 1330 GMT as well as Federal Reserve Chairman Jerome Powell's speech before a virtual Economic Club of New York event at 1900 GMT. silver XAG= fell 0.1% to $27.17, while palladium XPD= climbed 1.5% to $2,353.99.

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