Gold firm near record highs, platinum drops

Gold firm near record highs, platinum drops
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First Published: Thu, Feb 28 2008. 10 16 AM IST
Updated: Thu, Feb 28 2008. 10 16 AM IST
Singapore: Gold firmed on Thursday, hovering within sight of a record high hit the previous day, while speculators sold platinum as they waited for new developments in South Africa’s supply problems.
Gold rose to $958.10/958.90 an ounce from $957.50/958.30 late in New York. Gold rallied to an all-time high of $964.70 an ounce on Wednesday as the dollar tumbled against other currencies on possible US interest rate cuts.
Gold has gained around 15% in 2008 on investor buying driven by record high crude oil and the prospect of more interest rate cuts, which raised the metal’s appeal as an alternative investment.
The upside target was pegged by dealers at $1,000 a an ounce.
“In times of sharp rises in prices, it’s a must to remember there are plenty of investors and traders waiting to re-enter on dips,” said Pradeep Unni, analyst at Vision Commodities in Dubai.
“The Federal Reserve is likely to slash rates further on 18 March, propelling gold further north. Multiply closing above $950 would mean sustained gains in coming days.”
The dollar held near record lows against the euro as a sharp drop in durable goods orders and home sales fueled recession concerns while Fed Chairman Ben Bernanke signalled a readiness to cut interest rates again. “It’s clear that investor interest in commodities as a whole remains very strong with particular interest from the pension funds who look for return in commodities when many other markets are either too volatile or are falling,” said Investec Australia.
In other precious metals, silver held near a 27-year high, palladium fell below Wednesday’s 6-1/2-year high, while selling in Japanese futures put pressure on cash platinum.
Platinum dipped to $2,120/2,127 from $2,130/2,140 an ounce late in New York. It rallied to record of $2,192 on Feb. 22 in another round of speculative buying as persistent power supply problems disrupted mining in South Africa, the world’s main producer.
“Recently, we haven’t heard any fresh news from South Africa. That’s why speculators decided to take profits,” said a dealer in Tokyo.
“The Tokyo stock market is also falling sharply, which triggers selling in other TOCOM contracts. I guess speculators want to get some cash,” he said.
In January, the world’s biggest platinum and major gold mines were forced to halt output for five days as South African power utility Eskom restricted mining firms to 90 percent of their normal consumption, leading metal producers to forecast declines in output.
The most active February 2009 contract on the Tokyo Commodity Exchange ended the morning session 166 yen per gram lower at 7,091 yen, with a firmer yen against the dollar also spurring liquidation.
Silver edged up $19.24/19.29 an ounce from $19.22/19.27 an ounce, having reached a 27-year peak of $19.45 on Wednesday. Palladium fell to $547/552 an ounce from $550/552 late in New York on Wednesday.
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First Published: Thu, Feb 28 2008. 10 16 AM IST
More Topics: Markets | Precious | Gold | Platinum | Silver |