(Updates to afternoon with prices)
By Atul Prakash
LONDON, Feb 15 (Reuters) - Platinum surged 3 percent to hit
a record high for the 12th successive day on Friday, with acute
power problems in top producer South Africa encouraging
investors and consumers to buy up the metal.
Spot metal <XPT=> hit a high of $2,060 an ounce before
easing to $2,054/2,064 at 1552 GMT, against $1,997/2,007 in New
York late on Thursday. It has jumped more than 34 percent this
year on the top of 37 percent gains recorded in 2007.
"It's panic, panic, panic. If you are a platinum consumer,
you are not going to sleep at night," said Robin Bhar, metals
analyst at UBS Investment Bank.
"The price move shows you the unprecedented nature of the
market. People can see actual physical shortages somewhere down
the road and prices moving away from them. It's not a case of
just speculation. There is genuine demand coming through."
South Africa, which accounts for 80 percent of global
platinum supply, has been hard hit by power cuts since early
January, forcing mines to shut for five days last month.
South Africa's state power firm Eskom said on Thursday it
would increase coal purchases and buy back electricity from
those industrial users able to reduce consumption under a plan
to address crippling shortages. []
Analysts say the platinum deficit could widen to 400,000 to
500,000 ounces by the end of 2008, compared with about 265,000
ounces in 2007. The market had a surplus of 65,000 ounces in
2006 following seven successive years of deficits.
"Platinum supplies are heavily dependent on this market, and
the delicate power supply situation as well as concerns about
mine safety leave mine output extremely susceptible to potential
disruptions," Barclays Capital said.
"The market is set to retain its deficit, further eroding
the low level of above ground inventories thus further buoying
platinum prices," it said in a report.
Impala Platinum <IMPJ.J>, the world's No. 2 producer, on
Thursday forecast "very tight market conditions". The top
producer Anglo Platinum <AMSJ.J> said this week the power
problem alone would cut output by 120,000 ounces in 2008. It has
shut it Polokwane smelter for weeks of repairs. []
"Given the continued problems in South Africa, we expect
platinum to extend recent gains," said Michael Widmer, metals
analyst at Lehman Brothers.
GOLD GAINS
Gold also advanced, helped by a weaker dollar and Thursday's
comments from Federal Reserve Chairman Ben Bernanke reinforcing
the impression it will cut its benchmark rate by 50 basis points
in the U.S. central bank's next policy meeting in March.
Spot gold <XAU=> rose as high as $915.20 an ounce and was
last quoted at $908.60/909.30 an ounce, against $907.10/907.90
in New York late on Thursday.
U.S. gold futures <GCJ8> rose $1.3 an ounce to $912.10.
"The return of the weak dollar/strong oil scenario should
prove support for gold in the coming sessions. As well, traders
again interpreted Bernanke's comments to suggest a further rate
cut may be in the pipeline," said James Moore, metals analyst at
THeBullionDesk.com.
"Gold now needs to conquer chart resistance at $913 and $927
or else the metal will remain vulnerable to a deeper correction
back to the $875-$882 area."
Bernanke told the U.S. Senate Banking Committee the central
bank "will act in a timely manner as needed to support growth
and to provide adequate insurance against downside risks."
A rate cut tends to boost gold' appeal as an alternative
investment to currencies and bonds.
Harmony Gold <HARJ.J>, the world's fifth-biggest producer,
posted a wider second-quarter loss per share after an accident
closed a mine and warned the power crisis was hitting output.
Palladium <XPD=> firmed to $438.50/442.50 an ounce from
$433/437, while silver <XAG=> rose to $17.33/17.38 an ounce from
$17.24/17.29.
(Reporting by Atul Prakash; editing by Chris Johnson)
