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Platinum wallows near 7-year low amid demand concerns

Published 30/09/2015, 10:58
© Reuters.  Platinum futures struggle near 7-year lows
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Investing.com - Platinum futures struggled near the lowest level since December 2008 on Wednesday, as fears that the Volkswagen (XETRA:VOWG) emissions scandal would reduce demand from the auto sector weighed.

Platinum for January delivery on the Comex division of the New York Mercantile Exchange inched up $6.00, or 0.65%, to trade at $924.10 an ounce during U.S. morning hours.

A day earlier, platinum futures fell to $899.60 an ounce, a level not seen since the peak of the global financial crisis, before paring losses to end at $918.10, down $4.40, or 0.48%.

Platinum prices are on track for a 14.7% drop in the second quarter, the worst quarterly performance since 2008.

Prices of the metal have been under heavy selling pressure in recent sessions as the Volkswagen diesel emissions scandal sparked fears over a slowdown in demand.

Diesel engines are largely produced with platinum.

Elsewhere, gold for December delivery on the Comex division of the New York Mercantile Exchange inched down $3.60, or 0.32%, to trade at $1,123.20 a troy ounce.

Market players looked ahead to key U.S. data later in the day for further indications on the strength of the economy and the likelihood of a near-term interest rate hike.

The U.S. was to release the ADP jobs report for September at 8:15AM Eastern time, followed by the Chicago purchasing managers’ index, due for release at 9:45AM ET.

Traders will also be keeping an eye on Fed Chair Janet Yellen, who is due to give welcome remarks at the Federal Reserve's annual community banking conference in St. Louis later on Wednesday.

Gold futures are on track for a 4% drop in the three months ending September 30 amid indications the Federal Reserve was likely to raise interest rates in 2015.

Most economists believe the U.S. central bank will begin raising rates in December after holding policy steady in September due to concerns over the global economy, particularly China.

The timing of a Fed rate hike has been a constant source of debate in the markets in recent months.

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