The August malaise wears on, with narrow trading ranges and low volume in stock indices (despite making new 4-year highs), but not every market has been boring and quiet lately. Take a look at platinum, for example. It’s up 9.3% in the last 5 days, a big number even for this often volatile market.

What’s causing the jump in prices? Well, it had been down about 20% from its Feb highs and wasn’t really participating in the risk on rally with gold, silver and stocks like it was supposed to, but it looks like there are more nefarious reasons as well. Via Reuters Mineweb:

An outbreak of violence at a mine of [mining company] Lonmin that left 44 dead and dozens injured last week, paralysing production at the world’s third-largest producer, has highlighted the reliance of the platinum market on South African supply.

Miners at Royal Bafokeng Platinum’s Rasimone mine in South Africa were blocked from going to work by colleagues on Wednesday, while Anglo American Platinum, the world’s biggest platinum producer, said it had received a demand from employees for an increase in wages.

Violence and disruptions at South African mines caused a nearly 10% spike. That’s the definition of tightly supplied, illiquid market – meaning platinum is likely not in the portfolios of many large managed futures programs. But it is in a good deal of portfolios we come across where the manager is the right size to be able to get in and out without causing a spike like this.

Now, we don’t wish violence upon anybody, and it is a shame that the fundamental factor for this move involves violence – but the bigger picture here is another example of a commodity market decoupling from the risk on/risk off trade and trading on its own fundamentals. That is a good thing from a portfolio diversification standpoint and welcome sign for managed futures moving forward.