Platinum surged to a three-month high, exceeding the price of gold for the first time since April, after the world’s largest producer said it will cut production. Palladium reached a 10-month high and gold rose.
Anglo American Platinum Ltd. said today it will idle four shafts in South Africa, cutting output by 400,000 ounces a year, after a review of its operations. The reduction is equal to almost 7% of total global production. The metal is mainly used in pollution-control devices in cars and in jewelry, and Barclays Plc estimated last month that supply will fall short of demand by 38,000 ounces this year.
“There is a rush to buy platinum as today’s news means that the market will be pushed further into deficit,” Adam Klopfenstein, a senior market strategist at Archer Financial Services Inc. in Chicago, said in a telephone interview. “We are seeing strength in other precious metals as well.”
Platinum futures for April delivery climbed 2.3% to $1,696.40 an ounce at 10:01 a.m. on the New York Mercantile Exchange after touching $1,706.80, the highest for a most-active contract since Oct. 9. The precious metal has risen 9.9% this month, surpassing last year’s 9.8% gain.
An ounce of gold bought as little as 0.99 ounce of platinum in London earlier today, compared with about 1.16 ounces in August, data compiled by Bloomberg show.
Palladium futures for March delivery added 1.6% to $714.90 on the Nymex, after reaching $725, the highest since Feb. 29.
Gold advanced for a second day after Federal Reserve Chairman Ben S. Bernanke said yesterday that while the economy is responding to monetary stimulus there is still “quite a ways to go.”
“The market is reading this as a sign that the easing will continue for some time,” Klopfenstein said.
Gold futures for February delivery rose 0.6% to $1,680.20 an ounce on the Comex in New York. Yesterday, prices climbed 0.5%.
Silver futures for March delivery increased 0.5% to $31.265 an ounce on the Comex.