Gold, platinum hit record highs

Gold, platinum hit record highs
PTI
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First Published: Fri, Jan 25 2008. 01 52 PM IST
Updated: Fri, Jan 25 2008. 01 52 PM IST
Singapore: Gold and platinum hit all-time highs on Friday on dollar weakness, supply concerns, firm oil and expectations of more interest rate cuts in the US.
Spot gold hit an intraday high of $914.50 an ounce, surpassing last week’s record peak.Gold was last quoted at $907.00/907.70 an ounce in New York on Thursday.
Platinum hit another record high of $1,618.50 an ounce on investment demand, gains in gold and after Lonmin Plc slashed its sales outlook for the year. The metal was last quoted at $1,606/1,611 an ounce in New York.
The benchmark platinum future in Tokyo rose by its daily 120 yen limit to 5,350 yen a gram to track the cash market.
“Platinum is confronted by a big supply and demand problem. The price will be very strong in the future. Within a month, the next price target is $1,650,” said Yukuji Sonoda, precious metals analyst at Daiichi Commodities in Tokyo.
Miners in South Africa, the world’s largest platinum producer, have had to deal with electricity outages as power utilities struggled to keep up with rising demand.
Lonmin, the world’s No.3 platinum producer, cut its sales outlook for the year after first-quarter refined platinum output slid by nearly a fifth due to safety shutdowns and persistent processing problems.
Sonoda said expectations of further U.S. interest rates cuts, which have underpinned a recovery in stocks markets after a rout at the start of the week, have encouraged investors to buy commodities.
“That’s a very good environment. By the end of June, gold will reach $1,000,” said Sonoda, who also expected more investors to shift to gold from government bonds.
Gold had tumbled to a three-week low of $849.50 on Tuesday as falling energy and equity prices forced investors to sell the metal to cover margin calls, but the Dow Jones industrial average has since recorded two consecutive days of gains on hopes for interest rate cuts and a fiscal stimulus package.
Fed policy makers are scheduled to meet on Jan. 29-30. A hefty emergency rate cut this week boosted sentiment in precious metals.
“After breaking the high, we may look at $950,” said Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong.
Gold could find solid support at around $908 an ounce on Friday and resistance was seen at $915, said Leung.
The euro was steady around $1.4760 bolstered after European Central Bank policymakers rejected talk of lower interest rates on Thursday and restated an intent to control inflation risks.
Oil extended its rally towards $90 a barrel after U.S. lawmakers confirmed an economic stimulus plan that helped quell fears of a recession.
The physical sector came to standstill in Hong Kong, but bullion dealers in Singapore saw sales of scrap from jewellers in Indonesia, which is Southeast Asia’s largest gold consumer.
Gold bars were offered at a discount of 20 U.S. cents to the spot London price in Hong Kong, unchanged from last week. Gold bars were on par in Singapore
COMEX gold futures extended gains, with the most active February contract rising $7.5 an ounce to $913.3.
Silver gained to $16.39/16.44 an ounce from $16.35/16.40. Palladium rose to $373.00/377.00 an ounce from $370.50/375.50.
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First Published: Fri, Jan 25 2008. 01 52 PM IST
More Topics: Markets | Gold | Platinum | Money Matters | Commodities |