Platinum powered to an historic high near $2,200 an ounce on Friday as
supply problems in top producer SA triggered speculative buying, but
erased gains later on profit-taking.
Bullish market sentiment also helped gold to advance and
trade near Thursday’s record high above $950 an ounce, but pared gains
later in the day.
Spot platinum jumped to a record high of $2,192 an ounce
before falling to $2,150/2,160 an ounce in afternoon trade. It was last
quoted at $2,151/2,161 in New York late on Thursday.
"It’s a long-term problem in South Africa and that’s
going to affect the platinum market for years to come. But for now, it
looks like it’s taking a breather," said Simon Weeks, managing director
of precious metals at Bank of Nova Scotia.
"We may go into sideways mode as with the economic
picture looking poor, demand will also start to drop. Although it’s
unlikely to be enough to make up the supply shortfall, it should at
least take the heat out of the panic buying."
Platinum, used in jewellery and auto catalysts, has
jumped more than 40% this year after mines in SA, accounting for 80% of
world output, were shut for five days at the height of last month’s
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 market is not yet sure how much platinum will be
available this year and the next year. While prices have adjusted
already, there might be further adjustments if we realise that the
supply is going to be even lower than expectations," said Frederic
Panizzutti, analyst at MKS Finance.
"Profit-taking is possible at any time in platinum but price dips will surely attract buying," he said.
Analysts say the global platinum deficit could widen to
500,000 to 600,000 ounces by the end of the year, compared with about
265,000 ounces last year. The market had a surplus of 65,000 ounces in
2006, following seven successive years of deficits.
"Ongoing supply disruptions in South Africa continue to
limit platinum’s downside risk, as traders view dips as buying
opportunities," TheBullionDesk.com said in a daily report.
"And with investors still increasing their holdings
through the ETFs, the market deficit is expected to widen considerably
with the spot price potentially set to challenge $3000/oz later in the
year," it said in a daily report.
London-based ETF Securities said on Thursday its platinum
exchange traded commodity fund had more than doubled its holdings of
the precious metal to 302,000 ounces since the start of last month.
In other precious metals, gold rose as high as 949,40 an
ounce and was last at $945,90/946,70, against $944,40/945,20 in New
York late on Thursday, when it hit a record of $953,60.
Dealers said the prospect of more US rate cuts supported
gold’s appeal as an alternative investment and kept the upward momentum
intact. Bullion has risen 14,4% this year.
US markets are now fully pricing in a 50 basis point cut
at the Federal Reserve’s next meeting in March to 2,50% and factor in a
small chance of an even bigger 75 basis points.
A rate cut tends to weaken the dollar and helps gold.
High prices has been hitting physical demand. A senior official at
World Gold Council said gold imports by India, the world’s largest
bullion consumer, fell 72% last month to about 24 tonnes from a year
Silver held near Thursday’s 27-year peak of $18,03 an
ounce. It was last at $17,93/17,98, versus $17,84/17,89 in New York.
Palladium was at 504/509 an ounce, versus $510/515 in New York and a
six-and-half-year high of $525 on Thursday.