Market Overview

Platinum ETFs Fall On Strike News

Shares of the ETFS Physical Platinum Shares (NYSE: PPLT), the largest ETF backed by physical holdings of the precious metal, are down 2.5 percent today on news that striking mine workers in South Africa are close to returning to work. Volume in PPLT, which has over $800 million in assets under management, is already roughly quadruple the daily average.

The ETF has surged 10 percent in the past month as an illegal strike in South Africa turned violent. South African police killed 34 protesters and strikers earlier this month and 45 deaths have been attributed to the labor strife, according to MarketWatch.

U.K.-based Lonmin announced earlier today its workers have agreed to a pay increase and will return to work. Those headlines are weighing on PPLT and the UBS E-TRACS Long Platinum TR ETN (NYSE: PTM). PTM, which tracks a basket of platinum futures contracts, is off 3.3 percent on volume that is already more than double the daily average. The ETN has soared 12.4 percent in the past month.

Adding to the pressure on platinum exchange-traded products, Anglo American Platinum said today operations at its Rustenburg facility in South Africa have resumed. The British firm has threatened action against its employees if they do not return for their next shift, Reuters reported.

South Africa is the world's largest platinum producer, but the iShares MSCI South Africa Index Fund (NYSE: EZA) is trading higher today. EZA, which has risen four percent in the past month, is up despite comments from South African President Jacob Zuma on Monday that the strike may have cost his country $563 million in lost gold and platinum production.

The strikes stopped work at seven gold and platinum mines also spread to the chrome sector, the Associated Press reported, citing the South African Press Association.

While EZA is climbing higher, the First Trust ISE Global Platinum Index Fund (NASDAQ: PLTM) is off by half a percent on heavy turnover. PLTM, which is an equity-based fund focused on miners of platinum, palladium, osmium, iridium, ruthenium and rhodium, allocates 31.5 percent of its country weight to South Africa.

PLTM is up about 8.7 percent in the past month. Home to 23 stocks, the ETF has $8.5 million in assets under management, according to First Trust data.

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