Platinum surged nearly three per cent to hit a historic high for the successive 12th day on Friday, with acute power problems in top producer South Africa forcing investors and consumers to hastily snap up the metal.
Spot metal hit a high of $2,055/2,065 an ounce at 12.42pm GMT, against $1,997/2,007 in New York late on Thursday. It has jumped 34 per cent this year on the top of 37 per cent gains recorded in 2007.
"It's panic, panic, panic. If you are a platinum consumer, you are not going to sleep at night," said Robin Bhar, metals analyst at UBS Investment Bank.
"The price move shows you the unprecedented nature of the market. People can see actual physical shortages somewhere down the road and prices moving away from them. It's not a case of just speculation. There is genuine demand coming through."
South Africa, which accounts for 80 per cent of global platinum supply, has been hard hit by power cuts since early January, forcing mines to shut for five days last month.
South Africa's state power firm Eskom said on Thursday it would increase coal purchases and buy back electricity from those industrial users able to reduce consumption under a plan to address crippling shortages.
Analysts say the platinum deficit could widen to 400,000 to 500,000 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.
"Platinum supplies are heavily dependent on this market, and the delicate power supply situation as well as concerns about mine safety leave mine output extremely susceptible to potential disruptions," Barclays Capital said.
"The market is set to retain its deficit, further eroding the low level of above ground inventories thus further buoying platinum prices," it said in a report.
Impala Platinum, the world's No. 2 producer, on Thursday forecast "very tight market conditions", while No. 1 producer Anglo Platinum said this week the power problem alone would cut output by 120,000 ounces in 2008.
Angloplat said it had shut it Polokwane smelter for weeks of repairs.
Gold also advanced, helped by a weaker dollar and Thursday's comments from Federal Reserve Chairman Ben Bernanke reinforcing the impression it will cut its benchmark rate by 50 basis points in the US central bank's next policy meeting in March.
Spot gold rose as high as $913.30 an ounce and was last quoted at $910.10/910.80 an ounce, against $907.10/907.90 in New York late on Thursday.
US gold futures rose $2.5 an ounce to $913.30.
"The return of the weak dollar/strong oil scenario should prove support for gold in the coming sessions. As well, traders again interpreted Bernanke's comments to suggest a further rate cut may be in the pipeline," said James Moore, metals analyst at TheBullionDesk.com.
"Gold now needs to conquer chart resistance at $913 and $927 or else the metal will remain vulnerable to a deeper correction back to the $875-$882 area."
Bernanke told the US Senate Banking Committee the central bank "will act in a timely manner as needed to support growth and to provide adequate insurance against downside risks."
A rate cut tends to boost gold' appeal as an alternative investment to currencies and bonds.
Harmony Gold, the world's fifth-biggest gold producer, posted a wider second-quarter loss per share after an accident closed a mine and warned South Africa's power crisis was now hitting output.
Palladium firmed to $437/440 an ounce from $433/437, while silver rose to $17.35/17.40 from $17.24/17.29 an ounce in the US market. (Reuters)
Platinum hits record high at $2,055