Platinum rose to its highest level since March 1980 in Asian trade on Wednesday as fund-buying resumed in Tokyo and propelled futures to a record high.
Spot platinum rose sharply to $980/984 an ounce in trade from $967/972 an ounce late in New York on Tuesday. Benchmark October platinum futures in Tokyo Commodity Exchange hit a record of 3,730 yen per gram following a market-friendly supply/demand report from Johnson Matthey Plc.
The precious metals refiner said on Tuesday that the platinum market was set to remain in deficit for a seventh year in a row in 2005 and prices could rise up to $1,030 an ounce during the next six months.
Prices were not likely to drop below $890 an ounce in the next six months, unless demand from jewellery makers falls more sharply than expected, it said.
Sister metal palladium was catching up and dealers said the outlook for the metal was positive because of the prospect of more demand from China. Spot palladium rose to $251/255 an ounce from $244/248 late in New York.
"The price gap between palladium and platinum is too wide. The next target is $255 and $260, but no matter what, these levels are still very low for palladium," said one dealer in Hong Kong, referring to levels last seen in May 2004.
"I think the upside momentum for palladium has started," he added. Johnson Matthey said the surplus of palladium supply over demand was expected to fall by more than 50 percent to 650,000 ounces in 2005 from the previous year because of a 6 percent growth in demand to 6.89 million ounces.
Purchases of palladium by China for jewellery manufacture are projected to soar to 1.2 million ounces this year, up 71 percent over the previous year, it said In other precious metals, gold rose to $469.70/470.20 an ounce from $467.90/468.60 last quoted in New York.
Dealers expected the metal to trade in a wide range of $466 to $476 this week, watching the currency market for leads. The euro was little changed from New York levels at around $1.1721 Silver rose to $7.78/7.81 an ounce from $7.74/7.76 last quoted in New York.