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Gold near record, platinum hits historic high

Gold near record, platinum hits historic high
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First Published: Fri, Feb 22 2008. 10 07 AM IST
Updated: Fri, Feb 22 2008. 10 07 AM IST
Singapore: Gold gained on Friday and held near an historic high hit the previous day, while platinum powered to record high as persistent supply problems in South Africa triggered another round of speculative buying.
Gold rose to $945.10/945.90 an ounce from $944.40/945.20 an ounce late in New York. On Thursday, it rallied to $953.60, its highest level ever, before a sharp decline in crude oil erased much of the day’s gains.
Dealers said the prospect of more rate cuts in the United States supported gold’s appeal as an alternative investment and kept the upward momentum intact. Bullion has risen as much as 14.5% so far this year.
Silver held near a 27-year high and palladium was within sight of a 6-1/2-year high. “The next probable stop in gold is around $955 and that is likely to be witnessed in coming days. Beyond that, $970 and $980 also seem possible,” said Pradeep Unni, an analyst at Vision Commodities in Dubai.
Gold could also undergo a correction but a price dip would attract bargain hunting and buying interest from main consumer India ahead of the busy marriage season in April, when demand for gold jewellery picked up, he said.
“Momentum is showing no signs of cooling and any pullback will ideally trigger fresh buying interest. The risk is quite high at such high levels but as long as gold trades above the $930 level, a major slide is unlikely.”
Crude oil extended falls on Friday after dropping more than $1 the previous day as growing inventories and weak economic data in the United Statesfuelled concerns that demand may soften in the world’s largest oil consumer.
Spot platinum jumped to a record high of $2,185 an ounce, up from $2,151/2,161 late in New York.
“People are happy to buy at lower levels,” said Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong, adding that there were also purchases from auto makers.
“We don’t know what the higher levels are, maybe $3,000 or $4,000. The only thing is that it seems people are happy to buy. That’s all,” he said.
Platinum, used in jewellery and auto catalysts, has jumped more than 40% this year after mines in South Africa, accounting for 80% of world output, were shut for five days at the height of last month’s power crisis.
South African power utility Eskom said it had contracted 30 million tonnes coal of the 45 million tonnes it needs over the next two years to help resolve a crippling power crisis.
The dollar was within sight of a two-week lows versus the euro after data showing the weakest regional factory activity since the last US recession in 2001 boosted expectations for a large Federal Reserve interest rate cut.
Japanese platinum futures also hit a new all time high. The most active December contract on the Tokyo Commodity Exchange rose 83 yen per gram to 7,288 yen.
Palladium rose to $512/517 an ounce from $510/515 an ounce, within sight of Thursday’s 6-1/2-year high of $525 an ounce.
Silver rose to $17.93/17.98 an ounce from $17.84/17.89 an ounce, not far from Thursday’s 27-year high of $18.03 an ounce.
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First Published: Fri, Feb 22 2008. 10 07 AM IST