Platinum Futures Gain in Tokyo as Oil Rally May Spur Inflation

By Dave McCombs

Aug. 21 (Bloomberg) -- Platinum futures in Tokyo gained for a second day as crude oil prices rose, prompting speculation higher energy costs will fuel inflation and demand for the metal as a hedge against it.

Platinum, palladium and natural rubber advanced in Tokyo as oil jumped for a third day after a report yesterday showed U.S. gasoline inventories dropped a fourth week.

``The gain overnight in oil prices is a very supportive factor for commodities such as platinum today,'' Kazuhiko Saito, a commodity strategist at Interes Capital Management, said today in Tokyo by telephone.

June-delivery platinum rose 0.7 percent to 4,793 yen a gram ($1,360 an ounce) at 12:07 p.m. on the Tokyo Commodity Exchange. The most-traded contract on Aug. 19 dropped to 4,555 yen a gram, the lowest since Aug. 29, 2007. It may decline to as low as 4,500 yen a gram next week, Saito said.

Platinum for immediate-delivery fell $5 to $1,372 an ounce, a 0.5 percent decline from yesterday in New York. The metal is down 40 percent from the record $2,301.50 set on March 4.

Crude oil for October delivery rose as much as $1.72, or 1.5 percent, to $116.70 a barrel on the New York Mercantile Exchange and last traded at $116.40.

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