Platinum climbs off decade lows, dollar drops for first time in four days

Platinum prices rose over two percent off December 8, 2008 lows for the second session, on track for the first weekly profit in six weeks as the dollar index backed off July 14, 2017 highs for another session, amid a lack of data from the US, and after President Donald Trump accused China and the European Union of manipulation their currencies. 

As of 01:27 GMT, platinum prices rose 2.44% to $826.83 an ounce from the opening of $807.11, while the dollar index fell 0.58% to 94.61 from the opening of 95.16. 

Trump Blasts EU, China 

President Donald Trump tweeted earlier: "China, the European Union and others have been manipulating their currencies and interest rates lower, while the U.S. is raising rates while the dollars gets stronger and stronger with each passing day - taking away our big competitive edge. As usual, not a level playing field.."

He added: "Farmers have been on a downward trend for 15 years. The price of soybeans has fallen 50% since 5 years before the Election. A big reason is bad (terrible) Trade Deals with other countries. They put on massive Tariffs and Barriers. Canada charges 275% on Dairy. Farmers will WIN!"

President Donald Trump criticized the Federal Reserve in an interview with CNBC, saying he's "not thrilled" with rate hike decisions that lead to a stronger dollar, while China's yuan falls like a rock. 

He commended Fed Chair Jerome Powell as a "good man", adding he won't intervene into the Fed's actions, with the remarks overall weighing on the dollar on currency war concerns. 

In his two-day testimony before the two chambers of Congress, Fed Chair Jerome Powell pointed to strong economic growth this year with continued improvement in the labor market and inflation rates, while cautioning from short-term consequences to trade protectionism. 

Trade, Cars, Platinum  

The US trade dispute with other partners, and President Donald Trump's threats of imposing a hefty tax on European cars continue to cast shadows on platinum prices, which marked one-year highs earlier this year above $1,000, before tumbling to below $800 for the first time in a decade. 

Nearly 40% of global platinum demand comes from makers of diesel cars, of them 50% comes from European carmakers, as platinum has important diesel engine applications, and is effective in curbing diesel emissions.  

However, diesel technologies took a hit after the 2015 Volkswagen scandal, with the German carmaker confessing of falsifying diesel emission levels and incurring hefty fines in the US in particular. 

Russia and South Africa control 70% to 80% of global platinum supplies, with some reports indicating that platinum, a metal already rarer than gold- has already been exhausted from mines, even though the demand structure hasn't changed since the seventies when platinum and palladium emerged as major components of the car industry.