Platinum, Palladium Climb in New York on Inflation Concerns

Aug. 20 (Bloomberg) -- Platinum in New York rose the most in 11 weeks on speculation that the dollar will slump against the euro, bolstering the metal's appeal as a hedge against inflation. Palladium also gained.
The price of platinum has climbed 9 percent this year, while the dollar dropped 2 percent against the euro. The U.S. currency fell on Aug. 17 after the Federal Reserve cut its discount rate to calm equity and credit markets and shifted away from cooling inflation.
``When the dollar weakens, precious metals gain because people are looking for a hedge against inflation,'' said Kirill Chuiko, an analyst with Uralsib Financial Corp. in Moscow. ``There is a lot of investment demand.''
Platinum futures for October delivery rose $15.80, or 1.3 percent, to $1,247.40 an ounce on the New York Mercantile Exchange. That marked the biggest percentage gain since May 31. The price reached a record $1,353.80 On May 7.
The euro climbed 0.4 percent against the dollar on Aug. 17, snapping a four-day slump, and was little changed today after paring gains.
Platinum is ``fundamentally sound and no longer grossly overinvested,'' Stephen Briggs, a metals analyst at Societe Generale in London, said in a report.
Palladium futures for September delivery rose $2.20, or 0.7 percent, to $331.95 an ounce. The metal is down 2 percent this year.
Platinum and palladium are used to make pollution-control devices for cars and trucks, and jewelry.
Palladium tumbled 7.9 percent last week, and platinum fell 3.7 percent.
Palladium ``may struggle to regain lost ground,'' because the market ``remains fundamentally well supplied,'' Briggs said.