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Platinum tumbled to a 5-1/2-year low on Tuesday as the combination of a stronger dollar, weaker gold prices and improving supply took a toll on prices.
Platinum, the worst performing precious metal of the year, fell to $1,098.10 an ounce during Asian hours, its lowest since July 2009. It is down more than 8 percent this year.
Silver, platinum and palladium typically track gold prices, which are trading near a three-month low amid fears the Federal Reserve would soon hike U.S. interest rates.
A strong greenback, currently near a 12-year high against a basket of major currencies, is also dragging on dollar-denominated commodities.
Adding to these, platinum supply is getting better after a five-month strike last year in South Africa, the top producer.
Platinum is currently trading a discount of nearly $53 an ounce to gold – the biggest spread since March 2013.
GOLD EYES FED
Spot gold was steady at $1,155.91 an ounce by 0340 GMT, near last week’s $1,147.10, the lowest since Dec. 1.
Traders were waiting this week’s Fed policy meet to gauge the timing of a U.S. rate hike.
The U.S. central bank begins its two-day policy meet on Tuesday, with a statement expected on Wednesday.
Expectations that the Fed would begin increasing interest rates as soon as June on a strong economy have boosted the dollar. Higher rates could dent demand for assets such as bullion that do not pay any interest.
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