(recasts, adds quotes, changes prices, pvs SINGAPORE)
By Atul Prakash
LONDON, Feb 6 (Reuters) - Platinum hit an historic high on
Wednesday as the market remained concerned about supplies from
top producer South Africa following a power crisis in the
country that has hit mining operations.
Other precious metals also advanced, with gold rising more
than 1 percent to trade just below $900 an ounce and silver
gradually moving towards its recent 27-year highs.
Spot platinum <XPT=> rose as high as $1,814 an ounce before
easing to $1,807/1,812 at 1133 GMT, against $1,770/1,775 late in
New York on Tuesday.
"The lack of spare power generating capacity in South Africa
is not only affecting output in the short term but has the
potential to delay new projects by months or even years," said
Tom Kendall, metals strategist at Mitsubishi Corporation.
"Speculators have got this platinum bull by the horns and
could easily drive the price towards $1,900. The market will
remain very volatile at least until Anglo Platinum and Impala
have released financial statements next week."
He said the platinum market was likely to see a deficit of
at least 350,000 ounces this year and perhaps much more on top
of last year's 375,000 ounces shortfall.
South Africa's government appealed to mining firms for help
in cutting power consumption on Tuesday to ease a power crisis
caused by the failure of electricity generation to match
economic growth. []
GOLD NEAR $900
Gold bounced back towards $900 an ounce as recent drops
attracted physical buyers and bargain hunters, analysts said.
Spot gold <XAU=> rose to $897.10/898.00 an ounce from
$886.85/887.55 late in New York on Tuesday, when it hit a
two-week low of $885.30 mainly on a firmer dollar.
The metal rose to a record high of $936.50 on Feb.1.
"Both the external and fundamental drivers remain price
positive for gold," said Suki Cooper, precious metals analyst at
Barclays Capital.
"Expectations for further Fed rate cuts as well as concerns
about the broader macro-economy and the dollar failing to
convincingly halt its decline should underpin prices," she said.
But a firmer dollar and a decline in oil prices on Wednesday
capped gains, analysts said.
The euro extended losses against the dollar after tumbling
the previous day on weak euro zone service sector data which
raised expectations that the European Central Bank will cut
interest rates later this year. Oil fell below $88 a barrel.
A firmer dollar makes gold costlier for holders of other
currencies and often lowers bullion demand. The metal is also
generally seen as a hedge against oil-led inflation.
"Gold is getting some safe-haven flows as the equity market
outlook is very poor," said David Thurtell, metals analyst at
BNP Paribas.
"There has been a good clean-out of the weak longs in recent
days and profit-taking after all the South African and Chinese
production problems. I see limited downside in the short term."
European shares traded lower, tracking falls in the United
States and Asia on growing recession fears, and hit by losses in
BHP Billiton <BLT.L> and banks.
Miners were mainly negative though investors were torn
between concern that BHP Billiton's <BLT.L> monster $147 billion
bid for rival Rio would succeed and hope that persistent talk of
a bid for Xstrata <XTA.L> from Brazil's Vale <VALE5.SA> would
lead to a deal.
In other bullion markets, U.S. April gold futures <GCJ8>
rose $10.9 an ounce to $901.10 in electronic trade.
Palladium <XPD=> rose to $413/418 from $411/415 an ounce,
but was off Tuesday's six-year high of $427. Silver <XAG=> rose
to $16.43/16.48 an ounce from $16.32/16.37 in New York.
(Reporting by Atul Prakash; editing by Peter Blackburn)
