(Updates with quotes, closing prices, market activity, adds
NEW YORK to dateline)
By Frank Tang and Atul Prakash
NEW YORK/LONDON, Feb 22 (Reuters) - Platinum powered to an
historic high near $2,200 an ounce on Friday as supply problems
in top producer South Africa triggered speculative buying, but
erased gains later on profit-taking.
Bullish sentiment also helped gold to advance and trade
near Thursday's record high above $950 an ounce, but finished
lower as investors consolidated recent solid gains ahead of the
weekend, but dealers said bullion still has leg to go higher
next week. Silver also scaled a 27-year peak.
Spot platinum <XPT=> jumped to a record high of $2,192 an
ounce before falling to $2,148/2,153 an ounce at 3:18 p.m. EST
(2018 GMT), lower than New York's late Thursday quote of
$2,151/2,161.
The active U.S. NYMEX platinum contract for April delivery
<PLJ8> closed down $20.40 to $2,167.80 an ounce.
"It's a long-term problem in South Africa and that's going
to affect the platinum market for years to come. But for now,
it looks like it's taking a breather," said Simon Weeks,
managing director of precious metals at Bank of Nova Scotia.
Platinum, used in jewellery and auto catalysts, has jumped
more than 40 percent this year after mines in South Africa,
accounting for 80 percent of world output, were shut for five
days at the height of last month's power crisis.
South African power utility Eskom said it had contracted 30
million tonnes coal of the 45 million tonnes it needs over the
next two years to help resolve a crippling power crisis.
"The market is not yet sure how much platinum will be
available this year and the next year. While prices have
adjusted already, there might be further adjustments if we
realise that the supply is going to be even lower than
expectations," said Frederic Panizzutti, analyst at MKS
Finance.
Analysts say the global platinum deficit could widen to
500,000 to 600,000 ounces by the end of 2008, compared with
about 265,000 ounces in 2007. The market had a surplus of
65,000 ounces in 2006, following seven successive years of
deficits.
Meanwhile, investment demand remained robust for platinum.
London-based ETF Securities said on Thursday its platinum
exchange traded commodity fund <PHPT.L> had more than doubled
its holdings of the precious metal to 302,000 ounces since the
start of January. []
GOLD OUTLOOK BRIGHT
In other precious metals, gold <XAU=> rose to a high of
949.40 an ounce before falling as low as $935.30. It was at
$943.70/944.50 by New York's last quote at 2:15 p.m., against
$944.40/945.20 in U.S. market late on Thursday, when it hit a
record of $953.60.
The gold contract for April delivery at the COMEX division
of the New York Mercantile Exchange <GCJ8> settled down $1.40
at $947.80 an ounce.
"Certainly there are a lot of positive, bullish factors out
there for gold, still. But we've had a big run-up recently and
there seems to be some profit taking," said Patrick Fearon,
precious metals analyst of A.G. Edwards & Sons in St. Louis.
Fearon said that inflation fears, output decline from top
producer South Africa and the expectation of sizable U.S. rate
cuts should boost the precious metals.
"In the past when we've seen bouts of profit taking,
sometimes they haven't really lasted very long. There is a
pretty good chance that we will still see some upward momentum
next week for all the metals," Fearon said.
Bullion has risen 14.4 percent this year.
High prices has been hitting physical demand. A senior
official at World Gold Council said gold imports by India, the
world's largest bullion consumer, fell 72 percent in January to
around 24 tonnes from a year ago,
Silver <XAG=> reached a 27-year peak of $18.09 on Friday.
It was at $17.98/18.03 an ounce, compared with its previous
close of $17.84/17.89 on Thursday. Palladium <XPD=> was at
$498/503 an ounce, versus $510/515 late in New York on Thursday
and a 6-1/2-year high of $525 on Thursday.
(Editing by Marguerita Choy)
