(recasts, adds quotes, changes prices, pvs TOKYO)
By Atul Prakash
LONDON, Feb 8 (Reuters) - Platinum drifted lower on Friday
after trading just below historic highs, but analysts said
persistent supply concerns in top producer South Africa would
propel the metal to new peaks in the coming weeks.
Other precious metals advanced on bullish market sentiment,
with gold rising towards its historic high of $936.50 an ounce
and palladium matching Wednesday's six-year peak.
Spot platinum <XPT=> rose as high as $1,848 an ounce before
falling to $1,835/1,843 at 1126 GMT, against $1,841/1,846 late
in New York on Thursday when it hit a record high of $1,850.
"The platinum market seems very nervous. The situation might
normalise in the sense that there won't be any major mine
stoppages because electricity is cut completely, but we are
unlikely to see mines getting 100 percent electricity supply,"
said Johannesburg-based Walter De Wet, analyst at Standard Bank.
"You have got to accept that the South African mines will
need to operate at 90 percent of the electricity usage and a 10
percent cut in electricity will translate into more than 10
percent cut in production."
He said the country was likely to witness a production loss
of 300,000 ounces this year and the total market deficit could
rise as high as 400,000 ounces in 2008.
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 about
80 percent of the world's output, halted mining operations for
five days in January with a significant loss of production.
"The supply/demand outlook remains very positive for
platinum as there is no quick fix for the supply-side problems,
while the bulk of demand is price-inelastic and inventories sit
at historically low levels," Barclays Capital said.
"Even though investor sentiment is likely to remain
positive, in our view, it is the metal's fundamentals and not
funds that will drive prices to new highs," it said in a note.
GOLD GAINS
Gold continued to trade above $900 on positive sentiment,
with supply problems and plans by some producers to cut their
hedging positions underpinning the market.
Spot gold <XAU=> rose as high as $916.50 and was last quoted
at $912.70/913.60 an ounce, against $908.80/909.50 in New York.
"The fact that dips below $900 remain well supported
continues to suggest that investors are still keen to increase
their holdings. Once the current base building phase is over,
the metal will look to challenge last weeks $936.80 high," said
James Moore, analyst at TheBullionDesk.com.
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. []
Peruvian miner Buenaventura <BUEv.LM><BVN.N> said on
Wednesday it would pay $434 million to unwind hedges on gold due
for delivery in 2010 and 2012. []
U.S. gold futures advanced gained, with the April contract
<GCJ8> trading up $7.1 at $917.10 from the New York settlement.
Silver <XAG=> rose more than 1 percent to $16.96/17.01 an
ounce from $16.74/16.79 in New York, while palladium <XPD=> rose
as high as $429 an ounce before easing to $428/433, still uo $7
from its close in the U.S. market.
(Additional reporting by Chikafumi Hodo in Tokyo)
(Reporting by Atul Prakash; editing by Michael Roddy)
