US platinum futures rose to a record high for a sixth straight session on Thursday, as speculative buying and chart-based support fuelled the metal's rally due to ongoing mining issues from top producer South Africa. Meanwhile, the news of gold producers reducing their hedge-books also propelled gold contracts despite a sharp rise of the dollar against the euro.
"People look at a lot of technicals in the precious metals in general. It's an uncharted territory and there is really nothing to go off at these levels. It's still very bullish for the market basically because of the fundamentals news from South Africa," said one New York precious metals broker. Analysts said that South Africa's failure to resolve its electricity generation issues will continue to hamper mining operations and to boost prices.
South Africa represents about 80 percent of the world's platinum output and is among the top producers in bullion and other precious metals. At 10:58 am EST (1558 GMT), the active Nymex platinum contract for April delivery was up $18.90 or 1 percent at $1,837.90 an ounce, after rising to a record peak of $1,855. Spot platinum fetched $1,833/1,838.
Dealers expect the price of platinum could reach $2,000 an ounce in the near term because of a huge deficit in the platinum market. The white metal is used to clean vehicle exhaust fumes and for jewellery consumption. An informal survey of analysts responding to a Reuters precious metals price poll showed the market balance for platinum at an average deficit of 181,500 ounces by the end of 2008, narrowing slightly to 175,000 in 2009.
March palladium eased 45 cents to $423.00 an ounce. Spot palladium fetched $419/424 an ounce. Gold futures retraced early losses to trade higher in spite of a sharply stronger dollar. The gold contract for April delivery at the Comex division of the Nymex was up $4.40 to $909.40 an ounce. It was trading between $900.10 and $915.20.
Spot gold was quoted at $905.40/906.30, versus Wednesday's New York close of $900.40/901.10. London bullion dealers fixed the afternoon spot price at $899.75.
In other metals, Comex March silver was up 28.0 cents or 1.7 percent to $16.830 an ounce, trading between $16.500 and a high of $16.900. Spot silver was at $16.76/16.81, compared with its last Tuesday quote of $16.46/16.51. London silver was fixed at $16.70.