Platinum Highest in Almost a Month on South African Supply Worry

--Platinum futures settle up 1.3% after brief strike at major producer Tuesday

--Strike follows killing of union leader last week

--Gold climbed after U.S. ADP employment report, but bounce fades

--Comex August gains $1.30, or 0.1%, to settle at $1,398.50 a troy ounce

 
   By Matt Day 
 

NEW YORK--Platinum futures climbed to a nearly four-week high Wednesday as investors bet that supplies may be disrupted following fresh labor strife in the top platinum-producing country.

A series of strikes and a shooting at a union office in the last few weeks have renewed tension in South Africa's mining industry. The country last year churned out 73% of the world's platinum output last year, according to specialty chemicals company and major industrial precious metals user Johnson Matthey PLC, and 35% of palladium.

The most actively traded platinum contract, for July delivery, rose $19.50, or 1.3%, to settle at $1,510.60 a troy ounce on the New York Mercantile Exchange, the highest settlement since May 9.

Palladium rose 0.7% to settle at $756.45 a troy ounce. Palladium in South Africa is produced as a by-product of platinum mining.

Thousands of workers at Impala Platinum Holdings Ltd., the second-largest platinum producing company, staged a brief strike Tuesday before resuming work overnight, the company said.

A union leader was killed and another wounded in a shooting at a Lonmin PLC office last week. The same Lonmin mine was the site of a two-day strike last month, and in August clashes between police and protesters there left 34 protesters dead.

Lonmin spokeswoman Sue Vey said the atmosphere at the mine was "fragile" Wednesday. "You can feel the fragility of it," Ms. Vey said.

"The tensions in South Africa have not abated," Societe Generale analyst Robin Bhar said in a note. "There is still a risk of further industrial action."

Gold futures edged higher Wednesday as a report on U.S. hiring came in weaker than expected. The most actively traded gold contract, for August delivery, rose $1.30, or 0.1%, to settle at $1,398.50 a troy ounce on the Comex division of the Nymex.

Payroll processor ADP said the U.S. private sector added 135,000 jobs last month, below the expected gain of 170,000. Gold prices have been under pressure for much of this year as a strengthening U.S. labor market increased the perceived likelihood that the Federal Reserve would pull the plug on its stimulus measures.

Also Wednesday, India increased the tax on gold imports, part of the government's efforts to curb domestic consumption. Imports of refined gold will face a tax of 8%, from 6% previously, Revenue Secretary Sumit Bose said.

India is the largest gold consumer, and imports are a major driver of the country's trade deficit.

 
Settlements (ranges include open-outcry and electronic trading): 
London PM Gold Fix: $1,404.00; previous PM $1,399.50 
Aug gold $1,398.50, up $1.30; Range $1,395.10-$1,410.30 
Jul silver $22.472, up 6.3 cents; Range $22.290-$22.740 
Jul platinum $1,510.60, up $19.50; Range $1,489.10-$1,514.00 
Sep palladium $756.45, up $5.40; Range $751.70-$758.00 
 

-Devon Maylie, Rajesh Roy and Biman Mukherji contributed to this article.

Write to Matt Day at [e-mail]