Jan. 2 (Bloomberg) -- Platinum rose to a record, extending a six-year rally, as the dollar's decline against the euro boosted the metal's appeal as an alternative investment. Palladium also gained.
The dollar weakened against 13 of the 16 most-actively traded currencies as traders bet the U.S. Federal Reserve will cut borrowing costs at least twice in 2008. The weaker dollar helped platinum to a 33 percent gain in 2007, outpacing gold's 31 percent increase.
``Demand should remain strong in 2008 and dollar weakness continues to support higher metal prices, including platinum at record highs,'' said Walter Otstott, a senior broker at Dallas Commodity Co. in Dallas. ``I expect palladium to follow.''
Platinum futures for April delivery rose $20.60, or 1.4 percent, to $1,546 an ounce on the New York Mercantile Exchange. The price earlier reached a record $1,552 an ounce.
Palladium futures for March delivery rose $1.70, or 0.4 percent, to $379.90 an ounce. The metal climbed 12 percent last year, gaining for the third year in a row.
Platinum and palladium are used to make automobile emission-control devices and jewelry.
``Platinum is behaving much a like a precious metal rather than an industrial one,'' said Ralph Preston, a strategist at Heritage West Financial Inc. in San Diego. ``I'm anticipating $2,000-plus platinum this year'' as the metal outpaces gold, he said.
The dollar fell as low as $1.475 per euro today in New York, from $1.4592 yesterday. The currency dropped to $1.4967 on Nov. 23, the lowest since the euro's introduction in 1999.
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