Platinum in New York settled at a new 26-year high on Thursday on a third day of speculative and trade buying, while palladium hit a 17-month peak and gold and silver touched 10-day highs before pulling back slightly.
Dealers said the broad precious metals rally was fuelled by buying in Asia this week, which spilled over to European and New York sessions, amid expectations that growing commercial demand for platinum group metals would keep prices climbing.
January 2006 delivery platinum at the New York Mercantile Exchange rose $9.30, or 1 percent, to $965.50 an ounce, in a range of $954 to a contract high of $967.90.
Benchmark futures had not seen such a peak since they were falling from above $1,000 in 1979. "It's TOCOM (Tokyo Commodity Exchange) buying that's been fuelling the market," said a precious metals trader in New York, citing interest from commodity funds and speculators.
"It feels like in the medium term, platinum's going to hit $1,000, or at least try up there, because technically it looks pretty good," he added.
George Gero, a senior vice president at Legs Mason Wood Walker, said that consumer stockpiling of platinum and palladium for use in catalytic converters also lifted prices.
Both are crucial components of anti-pollution systems in motor vehicles. Platinum also is widely used in fine jewellery, and palladium jewellery recently became a popular, cheaper option.
Geopolitical news and economic uncertainty have given metals a boost as well, after on Wednesday's deadly bombings in Jordan and a US trade report on Thursday, Gero said.
"At this point, people are waiting to see if the markets are going to go to their next levels," he added. Spot platinum climbed to $959/962 an ounce in New York, above its previous close at $950/953.
December palladium shot up $4.30 to end at $242.95 an ounce, with the contract peak of $246.90 the loftiest for futures since June 2004.
Spot palladium was quoted at $239/243, up from $233/237 late on Wednesday.
Although palladium's value now is just 25 percent of platinum's, sources felt that its rally might have more legs. Emanuel Balarie, senior market strategist at Wisdom Financial Inc, said palladium should go higher, especially given recent news that leading producer Russia reported palladium stockpiles are much less than had been expected.
"I believe that the combination of dwindling supply and the increased demand for the metal will serve as a springboard for the price to test the $260 level within the next several months," he said in a note.
"I also expect some resistance near that level, but I believe that we will eventually see a sharp run up towards the $320 mark." In gold, benchmark December delivery futures rose 20 cents to $467.70 an ounce at Nymex's Comex division, dealing from $466 to $470.90 its highest level since October 31.
Gold rose despite the dollar's rally against the euro, with the greenback withstanding a brief sell-off after the US trade deficit surged in September.
Balarie said gold's fall below $460 this week and the resulting shake-out of some long positions had created a buying opportunity for investors, and he felt that the pullback also bolstered what he saw as a long-term bull move for the metal.
He added that, in addition to technical indicators, economic and political concerns probably would attract more people to what historically has been viewed as a safe haven. "I see it as potentially breaking $500 before the end of the year," Balarie said. Spot gold at last check fetched $466.70/467.50, up from its last close at $461.70/462.50.
The late fix by bullion dealers in London on Thursday was at $467. The trade gap rose to a record $66.1 billion in September, shattering the previous high of $60.4 billion set in February, due to record oil prices following Hurricane Katrina and a drop in overall exports.
The record trade gap was much wider than a mid-point forecast of $61.0 billion made by Wall Street economists. December silver gained 2.7 cents to $7.705 an ounce, trading between $7.67 to $7.79, which, like gold, was at its highest since Halloween.
Spot reached $7.68/70, up from $7.65/67 late on Wednesday. It fixed at $7.74.