Platinum Futures Gain as Dollar's Drop Spurs Investment Demand

By Dave McCombs

Aug. 27 (Bloomberg) -- Platinum futures in Tokyo advanced for a sixth day in seven as the dollar's drop from a six-month high against the euro and crude oil's gain boosted the appeal of the precious metal as an alternative asset.

Platinum has added 11 percent since dropping to 4,555 yen a gram ($1,296 an ounce) Aug. 19, the lowest in a year. The most- traded contract on Aug. 22 capped its sixth weekly decline, the longest losing streak since Aug. 17, 2001.

``Precious metals have also held most of their recent gains, a confirmation that the losses were overdone on the downside,'' John Reade, an analyst at UBS AG, said in a note to clients dated yesterday.

June-delivery platinum jumped 0.6 percent to 5,036 yen a gram ($1,433 an ounce) at the 11 a.m. break on the Tokyo Commodity Exchange. Platinum for immediate delivery advanced $20 to $1,440 an ounce at 11:28 a.m. in Tokyo, a 1.4 percent gain from yesterday in New York.

The dollar today fell from a six-month high against the euro on speculation weakening business and consumer spending will discourage the Federal Reserve from raising interest rates.

The U.S. currency dropped to $1.4699 per euro from $1.4653 yesterday, when it touched $1.4571, the strongest since Feb. 14.

ZKB Platinum advanced to 71,889 ounces in the week ended Aug. 22, Zurich-based ZKB said Aug. 25 in an e-mailed report. That compares with 65,504 ounces for the previous week.

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