By Allen Sykora
Platinum group metals are sharply lower as part of a market-wide “risk-off” trade on worries about the strength of the global economy, says a trader. “It’s the flight from risk,” he says. “We had a lot of bad data.”

The Federal Open Market Committee late Wednesday said recent economic data was weaker than expected. Overnight, the preliminary HSBC China Manufacturing Purchasing Managers Index fell to an 11-month low of 50.1 from a final May reading of 51.6. Further, the composite euro-zone PMI fell to a 20-month low of 53.6 in June from 55.8 in May.

This comes on top of continuing euro-zone sovereign debt issues. “The dollar is strengthening, so it (PGM weakness) is also a function of currencies,” says the trader. As of 9:13 a.m.

EDT, July Platinum was down $45.90, or 2.6%, to $1,706.50 an ounce. September Palladium was down $24, or 3.1%, to $746.65. “At some point, I’ve got to believe it’s a buying opportunity here,” says the trader of the steep declines.

By Allen Sykora of Kitco News; asykora@kitco.com

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