Platinum - Investment doubles

Net physical demand for platinum investment products more than doubled in 2008, rising by 250% from 170,000 ounces in 2007 to 425,000 ounces.

The really significant swing came in Japan; in 2007 Japanese investors resold 60,000 ounces of large platinum bars and investors remained net sellers in the early part of 2008, but there followed a palpable change in sentiment as yen prices fell sharply and equity market values were unraveling. The final quarter was especially strong, leading to overall net purchases for the year of 275,000 ounces of platinum.

European investment was down from 195,000 ounces to 105,000 ounces, while North American investment activity is reported to have increased by 33% from 30,000 ounces to 40,000 ounces as North American investors cleared the US Mint of its stocks of Platinum Eagles despite volatile prices.

Chinese demand for investment products is recorded as zero (the preference being for jewellery products while investment products are gold).

The 6% contraction in jewellery demand was driven by the Japanese market. Japanese jewellery demand is recorded for 2007 at 540,000 ounces gross, but 180,000 ounces net as a result of 360,000 ounces of recycling. In 2008, recycling jumped to 480,000 ounces and although gross purchases are recorded at just 5,000 ounces fewer than in 2007 at 535,000 ounces the impact on net demand was clearly substantial, taking it down by 125,000 ounces to just 55,000 ounces. Japan was the only region that reported increased scrap return. Much of this was concentrated in the first part of the year, and towards year-end those retailers who reduced prices saw a sharp rebound in demand with consumer purchases recovering towards 2007 levels.

Chinese scrap fell from 290,000 to 210,000 ounces over the year, so that Chinese net purchases for jewellery increased by 100,000 ounces in 2008 to 850,000 ounces or 62% of global net jewellery demand. High prices in the first half of the year saw manufacturers and retailers reduce their stocks and in the first half of the year, gross purchases were below 2007 levels while scrap return was high. The second half of the year saw the position reverse with secondary flows diminishing sharply and manufactures increased their purchases from August onwards.

Overall gross European demand remained constant at 200,000 ounces in each year, but high and volatile prices in the first half of the year impinged on jewellery sales and UK demand declined, while Switzerland became the largest European market with production of platinum watches in that country increasing by almost 14%.

Demand of Gold in India

India's gold demand slowed to a drop on Monday, after having picked up the preceding week when well-stocked traders braced for a marriage season, which lasts till June end.

An appreciating rupee makes the dollar-quoted gold cheaper. The Indian rupee rose to its strongest in three months in mid-morning trade, buoyed by wide losses in the dollar overseas, though it weakened later.

Gold traders have been stocking the yellow metal after better-than-expected Akshaya Tritiya sales on hopes of a good wedding season.

Foreign gold, which guides the domestic market, was steady as a sharper appetite for riskier assets such as equities dented interest in the metal as a safe haven, but a decline in dollar limited losses.

Copper, Nickel Rose

London copper futures rose on Tuesday on positive purchasing data from China and signs of recovery in U.S. housing, catching up after a three-day weekend to gains made in Shanghai.

But Shanghai gave up its early advances on worries prices have risen too fast.

Copper for delivery in three months on the London Metal Exchange MCU3 rose. Turnover was brisk.

There is a massive amount of selling in Shanghai related to arbitrage and it's dragging down LME. Focus is very much on the physical market -- there was a big rise in prices yesterday which may have reversed today.

Overnight data underpinned the market. Pending sales of previously owned U.S. homes rose for a second straight month in March, while construction spending edged higher, suggesting moderation in the long housing slump.

That fed into the positive sentiment generated by a survey of Chinese manufacturing that provided fresh evidence that massive fiscal and monetary stimulus is reviving the world's third-largest economy. Traders said Shanghai's direction for the rest of week would be dictated by London.

Nickel MNI3 rose 2.5 percent to $12,200, having touched $12,320 earlier. The market has been battered by a collapse in stainless demand, but the world's biggest stainless steel producer, Acerinox said on Monday it saw the market recovering in the third quarter after poor sales and weak prices pushed the Spanish firm into a first quarter loss.

The stability of nickel in recent months together with the very low level of stocks in all markets gives us confidence in a recovery of the market in the third quarter.

Diamond - slash in price

The $65 billion global diamond market is reeling. The price of polished gems dropped by an average of 31 percent since an August peak as the worst recession since World War II deterred buyers of luxury items like necklaces and earrings, according to diamond data company www.PolishedPrices.com. Antwerp, the world’s biggest gem trading hub, has seen exports drop as much as a third. De Beers, the largest diamond producer, slashed output by 91 percent.

People are not buying earrings, bracelets, things they can do without if they want to tighten their belts, they are still buying rings for weddings, engagement.

Wholesale diamond prices have dropped about 20 percent to 25 percent from their highs around June last year.

At the cheapest end of the market, Internet retailer Amazon.com Inc. is selling a platinum ring with a 0.5-carat diamond for $1,675, down from a list price of $3,425. The gem’s clarity is SI1 or SI2, meaning there are slight defects that normally can’t be seen by the naked eye.

Gold

Gold has had an inestimable effect on human history. It has been crafted, mined, worshipped, plundered, fought over and traded for thousands of years. Today, the search for gold is as eager as ever, despite the vast stocks stored away in underground bunkers. So why has gold held this fascination for humanity?

Its initial attraction is its color, an eye-catching and characteristic bright yellow with a soft metallic glint. Gold’s pleasant ‘feel’, a combination of its density (19.3 grams per cubic centimetre when pure) and coldness, cannot be duplicated by any other metal. Furthermore, gold can be hammered into very thin sheets or leaves, drawn into wire, cast, carved, polished, heated without tarnishing and easily combined (alloyed) with other metals.

Gold also conducts heat and electricity, reflects light and is untouched by nearly all acids, a property which led alchemists to christen it the noble metal. This combination of properties makes gold very stable in its natural metallic form, and also gives it many uses in electronics, ornaments, jewelry and advanced technology.

The color of gold is directly related to its purity. Crystallised gold and silver have the same atomic structure and their atoms are nearly identical in size, so that natural alloys of gold and silver are common.

Pure, or 24-carat gold, is the brightest yellow, but as the amount of silver increases the color becomes paler. Pale gold containing more than 20 per cent silver (corresponding to about 20-carat gold or less) has been called electrum. Trace amounts of copper, iron and palladium can also substitute in gold. Man-made alloys of gold with rhodium, iridium or palladium, intended to give gold greater hardness when used in jewelry, have been given names such as ‘white gold’. The carat scale is commonly used in jewelry, while in mining, an alternative scale uses ‘fineness’ of gold, where a figure of 1000 corresponds to pure or 24-carat gold.