The metal, which has fallen for seven sessions out of eight, has been hurt by news of Volkswagen AG’s falsification of USA vehicle emission tests as investors believe it could affect demand for diesel cars. In spite of a volatile month of trading, gold futures are up roughly 1% in September after opening the month around $1,125 an ounce. Platinum is widely used in autocatalysts, particularly for diesel engines.
The metal’s 15 per cent loss this quarter is its fifth straight quarterly drop and its worst three-month period since the third quarter of 2008.
“We tend to think that platinum prices have been oversold in the face of the emissions concerns and worries about diesel vehicle sales going forward”, said HSBC analyst James Steel. “The dips have been met a little bit with a few short-term buying”.
Even before the Volkswagen scandal broke last week, the platinum market had been suffering from an increase in supplies following the end of last year’s five-month strike among platinum miners in major producer South Africa, and a weakness in Chinese jewellery demand.
Several Fed officials are scheduled to speak this week keeping the focus firmly on USA monetary policy.
Dudley said the Fed “will probably raise rates later this year” and did not rule out a change in the federal funds rate as soon as October.
Among other metals, silver for December delivery dropped 57.3 cents, or 3.79 percent, to close at United States dollars 14.538 per ounce.
Gold had its worst session in 2-1/2 weeks on Monday, extending Friday’s losses ahead of a key USA jobs report later in the week that could boost bets the US Federal Reserve will raise interest rates this year.
But Charles Evans, head of the Chicago Fed called for rates to stay near zero until mid-2016.
“Gold remains driven largely by expectations of Fed policy, given the still high uncertainty about the hike date”, Barclays analysts said in a note.
Gold futures were trading slightly lower on Tuesday morning in the USA despite investor confidence returning to precious metals.
In wider markets, Germany’s DAX and France’s CAC-40 were each up 0.3 percent, while the euro was 0.4 percent softer at 1.1206 against the dollar.