(Updates with New York closing prices, market activity)
By Atul Prakash
LONDON, Feb 7 (Reuters) - Platinum spiked to a historic high
for the sixth trading day in a row on Thursday, as investors
flocked to buy the metal on concerns over supply from top
producer South Africa.
But prices pared gains later, as key metals retreated from
their highs following a rise in the dollar against the euro
after European Central Bank President Jean-Claude Trichet said
euro zone growth risks were to the downside.
Spot platinum <XPT=> rose to a record high of $1,850, before
falling to $1,841/1,846, against $1,810/1,815 in New York late
on Wednesday.
The U.S. NYMEX platinum contract for April delivery <PLJ8>
settled up $32.40 or 1.8 percent at $1,851.40 an ounce, after
rising to a record peak of $1,855.
Analysts said that despite the move of some investors to
take profits from record high prices late on Thursday, the metal
was poised to set new peaks in the coming months.
"Platinum prices continue to rise as energy supply in South
Africa has not improved substantially," said Michael Widmer,
metals analyst at Lehman Brothers.
"We forecast another supply shortfall in 2008 and therefore
keep our short-term price target at $2000/oz," he said.
South Africa has appealed to mining companies for help in
cutting power consumption to ease a power crisis caused by the
failure of electricity generation to match economic growth.
Platinum producers in the country, which accounts for more
than three-fourths of global output, are still facing power
problems after halting mining operations for five days in
January and losing significant production.
"People are now talking about a very significant supply
deficit yet again for platinum in 2008 and this is a problem
that is not going to go away in a hurry," said Ross Norman,
managing director at TheBullionDesk.com.
"Platinum is a very, very thin market in the sense that
there's very little metal between the miner, the refiner, the
fabricator and industrial clients. With the investment buying
coming in, being a thin market, it pushes the price massively
higher," he said.
DEFICIT TO WIDEN
The market witnessed a deficit of 265,000 ounces of platinum
in 2007 and analysts said the shortfall between demand and
supply might jump to 300,000 to 400,000 ounces this year.
Demand for platinum jewellery had badly suffered because of
high prices and New Year holidays in China, the world's top
consumer of platinum jewellery, traders said.
"There is no doubt that given what happened in the first
quarter so far, we are likely to have another deficit this
year," said Jeremy Coombes, general manager at Johnson Matthey,
the world's largest refiner and fabricator of platinum.
"There is some investor activity and there were some ETF
purchases last week."
London-based ETF Securities now holds more than 210,000
ounces of platinum in its exchange-traded fund (ETF), backed by
physical platinum.
Strength in platinum boosted gold. Spot metal <XAU=> rose as
high as $911 an ounce and was at $908.80/909.50 by New York's
last quote at 2:15 p.m. EST (1915 GMT), against $900.40/901.10
late in New York on Wednesday. Gold had reached a record high of
$936.50 set on Feb. 1.
Gold was also supported by news that safety shutdowns and
operational woes hit AngloGold Ashanti's <ANGJ.J> fourth-quarter
results. The world's third-biggest gold miner said a power
crisis would dent future production. []
Meanwhile, Peruvian miner Buenaventura <BUEv.LM><BVN.N> said
on Wednesday that it would pay $434 million to unwind hedges on
gold slated for delivery in 2010 and 2012. []
Palladium <XPD=> rose to a high of $429 an ounce before
falling to $421/425, versus its previous finish of $416/421.
Silver <XAG=> was at $16.76/16.81 an ounce, up from Wednesday's
close of $16.46/16.51.
(Additional reporting by Frank Tang in New York, Veronica Brown
in London and Chikafumi Hodo in Tokyo, editing by Matthew
Lewis)
