Platinum Futures Gain as Japan Wholesale Inflation Rate Climbs

By Dave McCombs

July 10 (Bloomberg) -- Platinum futures in Tokyo gained as a Bank of Japan report showed wholesale inflation jumped to a 27- year high last month, boosting demand for a hedge against rising consumer prices.

Metal for immediate delivery has jumped 30 percent this year, driven partly by concern soaring commodity prices will erode company profits, damp demand for equities and slash returns on bonds. Japanese producer prices for June climbed 5.6 percent from a year ago, the central bank said today.

``People are certainly concerned about rising food and energy prices and inflation, it's out of control,'' Peter McGuire, managing director at Commodity Warrants Australia, said today by phone. ``You've got to look at precious metals. There's nowhere else to turn.''

Platinum for June delivery in Tokyo gained 36 yen, or 0.5 percent, to 6,720 yen a gram ($1,957 an ounce) at the 11 a.m. break on the Tokyo Commodity Exchange.

Metal for immediate delivery rose $12 to $1,980.50 an ounce at 11:16 a.m. in Tokyo, 0.6 percent higher than yesterday in New York.

Japan's benchmark Nikkei 225 Stock Average has dropped 15 percent this year, while an index of Japanese government bonds with three to 10 years to maturity has dropped 0.09 percent.

To contact the reporter for this story: Dave McCombs in Tokyo at dmccombs@bloomberg.net