Nickel surges on labor dispute but gold eases
Nickel surges on labor dispute but gold eases
LONDON (Reuters): Nickel prices rose steeply in early European trading on Thursday as a labor dispute shut down operations at Canadian miner Inco Ltd.'s Thompson, Manitoba, division.
Three months London Metal Exchange (LME) nickel was trading at US$7,150 at 0731 GMT, up $185 from the Wednesday kerb close of $6,965 a ton.
Worries over a threatened strike at Thompson -- which produces 100 million pounds of nickel a year, or 4.5 percent of world production -- have driven the LME in recent days.
Prices fell over $300, or 4.5 percent, at one stage on Wednesday as a nervous market felt the strike might be averted, before reversing sharply on news of the shutdown.
"The news from Inco will definitely be supportive in this atmosphere, although it was expected," one London dealer said.
Dealers expected the price to continue climbing, eventually targeting $7,250, whether or not the lockout carried on, partly on technical factors and partly because demand from stainless steel producers -- the biggest end-users -- is rising.
"The uptrend is intact on the charts irrelevant of the news from Inco because the fund longs were flushed out of the market yesterday," one dealer said.
There was no indication of any movement by Inco, which had demanded that its 1,065 workers in Thompson, a tiny mining town 750 kilometers (470 miles) north of the provincial capital Winnipeg, accept a three-year wage freeze.
Gold eased in early Europe on Thursday but traders expected subdued business despite lower lease rates, as market participants remained wary ahead of next week's British gold auction.
One-month gold lease rates eased to around 4.23 percent from Wednesday's 4.85 as lending entered the market, improving liquidity.
Spot gold was last quoted at $255.70/$256.20 a troy ounce, down from the New York close at $256.50/$257. It was fixed at $255.70 from Wednesday's afternoon fix at $257.15.
Silver was last quoted higher at $5.09/$5.12 against Wednesday's $5.07/$5.10 New York close.
Platinum was higher at $374/$376 against $372.50/$374.50 and palladium also higher at $365/$370 from the 364/$369 New York close.