Platinum and gold prices at new high

The price of platinum forged a record high yesterday as the white metal was hit by tight global supplies, while gold soared to the best level since 1980 on the back of the weak US dollar, analysts said.

Platinum surged as high as $1,408.50 an ounce on the London Platinum and Palladium Market. That beat its previous all-time high point of $1,402.50 hit in November 2006. Gold prices leapt yesterday as high as $752.04 per ounce on the London Bullion Market.

Platinum is used by the jewellery industry and in the manufacture of catalytic exhaust units for vehicles. Platinum, already beset with tight supplies, took another hit from fresh concerns in South Africa.

“The rise in (platinum) prices has been supported by concerns over supply following news of electrical power shortages in South Africa — the world’s largest producer of platinum,” said Barclays Capital analysts.

“The power supply to smelters owned by Anglo Platinum was disrupted and reignited fears that the power situation could worsen over the next few years.”

Gold, meanwhile, tends to rise in value when the US unit weakens because it makes commodities that are priced in dollars cheaper for buyers using stronger currencies. “Gold prices strengthened again as US dollar weakness underpinned solid gains,” Barclays Capital analysts added.

The high came as the European single currency bounced back above $1.42, rising close to its record high $1.4283 that was struck on October 1.

The precious metal is also supported by strong crude oil prices, which in turn spark inflationary concerns. However, gold is regarded as a safe bet in times of rising inflation.

Global demand for gold is also surging owing to increased jewellery purchases in China and India, the World Gold Council said in its latest quarterly report, published in August. It added that demand was being fuelled by higher purchases of the metal by industry and wealthy individuals.

“The dollar’s continuing weakness, continuing high commodity prices and near record oil prices above $80 per barrel are inflationary and conducive to higher gold prices,” analysts at Gold Investments said.