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Hansen: Volkswagen scandal drives down industrial metals

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Industrial metals are being hit by the Volkswagen scandal and in particular platinum, says Saxo's Ole Hansen. It's hit a six-year low because of its contribution to catalytic converters in diesel engines. Hansen describes this a 'preemptive strike' by the market and notes that its discount to gold has reached 17%.

Gold meanwhile is holding on to most of its gains following the dovish FOMC statement. While gold priced in dollars is up on the week, gold priced in euros is up even more. Ole explains that this is because the market is speculating about the additional quantitative easing measures being put in place by the European Central Bank, adding support to gold.

Copper on the other hand is being hit hard, despite leading the industrial metal sector in August. Fears over falling demand, particularly from China, are worrying markets. Hansen notes that as copper falls so too are shares in mining company Glencore.