(Updates prices, adds premiums)
By Lewa Pardomuan
SINGAPORE, March 4 (Reuters) - Platinum struck a record for
the second straight day on Tuesday, catching up with gold as a
weaker U.S. dollar and persistent supply problems in South
Africa ignited buying from speculators and investors.
Platinum's gains pushed up sister metal palladium to a
6-1/2-year high. Gold was near an historical high hit the
previous day and on track to touch $1,000 an ounce on
expectations of further U.S. interest rate cuts and record high
crude oil.
Spot platinum <XPT=> hit a high of $2,243 an ounce,
surpassing Monday's top of $2,230 an ounce, and up from
$2,230/2,237 an ounce late in New York.
"Platinum will be trying the $2,500 mark. It won't be
surprising to see investors continue to buy platinum," said
William Kwan, a dealer at Phillip Futures in Singapore.
Platinum, used in jewellery and auto catalysts to clean
exhaust fumes, has risen more than 40 percent in 2008 as
problems with power supply which disrupted mining in main
producer South Africa triggered supply fears and sparked
speculative buying.
The most active Tokyo platinum futures <0#JPL:>, currently
February 2009, hit the daily 300 yen limit at 7,274 yen per
gram. It was later quoted 260 yen higher at 7,234 yen.
Gold <XAU=> hit a bid high of $987 an ounce, up from
$981.20/982.00 late in New York, within sight of Monday's
all-time high of $989.30 an ounce.
"Gold is being pushed up by the general bullish sentiment
across commodities. All hedge funds are buying the market up.
They are increasing their long positions," he said.
"There's a possibility before the FOMC, the market may
price in an aggressive rate cut, and push up the price to above
$1,000," said Kwan.
The U.S. Federal Reserve's Federal Open Market Committee
holds a one-day meeting on interest rates on March 18.
Short-term interest rate futures showed about a 75 percent
perceived chance of the Fed lowering its benchmark overnight
lending rate by 75 basis points at its next meeting.
In theory, lower interest rates elevate gold's appeal as an
alternative investment.
The dollar's trade-weighted index against six major
currencies was 73.701 <.DXY>. It hit 73.354 on Monday, its
lowest level since the index was created in 1973.
"Prices beyond $1,000 seem inevitable, but beyond this
psychological figure, price sustainability would be a key
issue," said Pradeep Unni, an analyst at Vision Commodities in
Dubai.
"Retail demand has hit rock bottom and this is a bad signal
for the long-term bull market. For the moment, immediate
resistance is likely around $992 and $1,004," he said.
The physical sector slowed to a trickle in Singapore on
Tuesday after jewellers in Indonesia and Thailand cashed in
their holdings the previous day to take advantage of
record-high prices.
"I think there will be initial selling by jewellers when
the price hits $1,000. But I am not sure if they will sell in
huge quantity because after all, they haven't bought a lot
lately," said a dealer in Singapore.
Premiums for gold bars were on par to the spot London price
in Singapore, unchanged from last week <GOLD/ASIA1>.
Gold futures for April delivery <GCJ8> on the COMEX
division of the New York Mercantile Exchange fell $2.2 an ounce
to $982.0 an ounce - off its record high of $992.00 hit Monday.
Spot palladium <XPD=> rose as high as $588 an ounce, its
highest in more than six years, up from $576/580 late in New
York.
Silver <XAG=> edged down to $20.17/20.22 an ounce from
$20.27/20.32 an ounce, having reached a 27-year peak of $20.60
an ounce on Monday.
Precious metals prices at 0421 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 979.80 -3.60 -0.37 17.67
Spot Silver 20.17 -0.13 -0.64 36.56
Spot Platinum 2235.00 5.00 +0.22 47.04
Spot Palladium 578.00 2.00 +0.35 57.07
TOCOM Gold 3281.00 13.00 +0.40 7.22
51383
TOCOM Platinum 7232.00 258.00 +3.70 35.46
29261
TOCOM Silver 676.40 8.10 +1.21 25.03
1933
TOCOM Palladium 2026.00 40.00 +2.01 49.96
17201
Euro/Dollar 1.5196
Dollar/Yen 103.35
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Editing by Michael Urquhart)
