The spot price of platinum on Monday equalled its all-time high of $1 047 an ounce set in March 1980, on Tokyo Commodity Exchange buying of the metal as well as the strong rand, which broke below R6 to the dollar, analysts said.
At 12.55pm, platinum was quoted at $1 042/oz, up $6,50/oz from its previous close.
“With the United States market absent today, there is scope that the funds could use the thin conditions to their advantage, propelling platinum beyond its all-time high and into uncharted territory,” United Kingdom-based analyst for TheBullionDesk.com James Moore wrote.
“The buying in platinum is largely fund-driven. Platinum has been boosted by reports that diesel engines are likely to gain market share in the US because they are more fuel-efficient,” said London-based Barclays Capital analyst Yingxi Yu.
The funds were also encouraged by the 13% decline in platinum group metal production from South Africa for the three months to November 2005, compared with the previous three months, Yu added.
The strong rand against the dollar had also boosted platinum, with the South African unit last quoted at R5,9713 to the US currency from Friday’s late trade of R6,0106.
South Africa is the world’s largest producer of platinum, and mines more than 75% of the world’s primary supply of the metal.
“The combination of a lot of positive factors could resulted in platinum seeing further gains to above $1 050/oz. Any correction in platinum would be limited due to fund interest,” Yu added.
Platinum is mainly used in the manufacture of jewellery and auto catalysts.
Palladium was last changing hands at $283/oz — up $1,50/oz from Friday’s close. Rhodium was last at $3 075/oz, unchanged from the previous close.
With the other metals in the precious metals complex back in bull mode, palladium now has the motivation to test the December high of $300/oz, Moore wrote.
Both palladium and rhodium are mainly used in the manufacture of auto catalysts.
At 12.55pm, gold was quoted at $559,76 a troy ounce, up $3,60/oz from its previous close. Earlier on Monday, gold climbed to $559,88/oz, the metal’s highest level since January 1981 on continued fund-buying.
“Gold is stronger, but its gains are more subdued than platinum. Gold is gaining on US dollar weakness, geopolitical tensions stemming from Iran and the threat of bird flu spreading further. Gold could break through $560/oz very soon, with next resistance at $565/oz,” Barclays analyst Yu said.
“Having cleared the $550/oz-to-$552/oz resistance band, it now looks like clear sailing for gold all the way to $563/oz to $565/oz as geo-political tensions, investor diversification and strong returns add to the precious metals allure,” Moore wrote. — I-Net Bridge