Singapore: Platinum spiked to another record high above $1,800 an ounce on Tuesday, with South African mines reporting slow progress in jacking up production in the midst of an electricity supply crisis.
Platinum’s rally lifted sister metal palladium to a six-year high but gold struggled after a drop to its lowest in nearly two weeks at $891.65 an ounce on Monday as investors booked profits from last week’s record high of $936.50 an ounce.
Spot platinum rose to $1,807.50/1,812.50 an ounce from $1,790/1,800 late in New York on Monday. Palladium jumped to $426/430 an ounce, its best level since early 2002, from $423/428 late in the US market.
Platinum and palladium are used in jewellery and in vehicle catalysts, where they help clean exhaust gases.
“The demand is here. I think $2,000 seems to be the next target,” said Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong.
“Speculators are buying platinum,” he said.
The worst was far from over for South African mines, which produce four-fifths of the world’s platinum, after state power firm Eskom allowed them only limited increases in their electricity consumption.
Tokyo platinum futures were also at record highs. The benchmark platinum futures contract on the Tokyo Commodity Exchange ended the morning session 56 yen per gram higher at 5,924 yen.
Gold was under pressure this week, overshadowed by platinum, after Friday’s rally to record high induced profit taking, but some dealers said the metal was still on track to touch new highs due to uncertainties in the dollar’s outlook.
Spot gold was at $904.85/905.60 an ounce, hardly changed from $904.40/905.10 late in New York. The metal has gone up more than 12% this year.
The price of gold is likely to peak at just over $1,000 per ounce in 2008 and benefit from any weakening of the US economy as investors seek new havens for their funds, London-based consultancy GFMS said on Monday. “Some of the factors that have supported the gold price still remain present,” said David Moore, a commodity analyst at the Commonwealth Bank of Australia.
“For the time being, the possiblity of further US interest rate cuts in coming months, maybe some further fragility in the US dollar, concerns over potential inflation are factors that might see gold being very volatile but volatile at higher level.”
The US Federal Reserve cut a benchmark interest rate by a cumulative 1.25 percentage points in the last two weeks of January to 3% in an effort to prevent the economy from sliding into recession.
The euro was at $1.4826 after rising on Friday to just below the lifetime high of $1.4968 after US data showing companies shed workers in January for the first time in 4 years.
COMEX’s February gold futures fell $0.4 an ounce to $909 an ounce.
Silver edged down to $16.66/16.71 an ounce from $16.69/16.74 in New York.