Spot platinum jumps as new futures contract in China aids demand

Silver fell 1%, after rising 3.7% on Wednesday to near its record. Palladium fell, while platinum was at $1,618.05.

Platinum surged as an exchange in China launched a futures contract on the metal, boosting optimism about the nation’s demand.

Spot prices gained as much as 3.8% to near $1,650 an ounce in London, the highest in more than a month. In China, futures for delivery in June rallied as much as 12%, then pared gains, as they began trading on the Guangzhou Futures Exchange, according to data from brokerage Guotai Junan Futures Co.

The new contracts, which are physically settled, cater to both institutional and retail investors, widening the pool of participants. The exchange will also publish a daily update of warehouse inventories, offering rare a insight into underlying conditions in one of the metal’s biggest markets.

Ahead of the launch, China imported 10.2 tons of platinum in October, more than double the volume in the same month last year. In addition to the new contract, flows were also lifted ahead of the Nov. 1 removal of a long-standing tax rebate enjoyed by China Platinum Co., a state-owned trading house.

Platinum has gained more than 70% this year, largely in line with silver’s performance but outperforming gold by a wide margin. The market is on course for a third annual deficit, amid supply disruptions in South Africa, a major producer. In addition, there’s speculation the metal may be tariffed by the US, luring ounces into the country and tightening conditions elsewhere.

In other metals, gold edged 0.3% lower to $4,148.75 an ounce at 11:35 a.m. in Singapore. The Bloomberg Dollar Spot Index was flat following a 0.3% drop in the prior session. Silver fell 1%, after rising 3.7% on Wednesday to near its record. Palladium fell, while platinum was at $1,618.05.