Platinum, gold prices conquer new peaks
'LONDON, May 12TH (Reuters) - Platinum prices extended sharp gains to set a new record high on a positive supply-demand outlook and dollar weakness on Friday, while gold surged to a fresh 26-year peak on strong investor interest.'
"There is more fundamental justification for platinum. We believe that even at these high prices, the platinum market is in deficit at the moment," said John Reade, analyst at UBS Investment Bank.
China witnessed good consumer demand in the last few months and generally users, rather than speculators and investors, had been buying the metal, he said.
Platinum (XPT=) reached a record high of $1,334 an ounce before easing to $1,320/1,328 by 1446 GMT, against $1,291/1,298 in New York late on Thursday.
The platinum market was in deficit for the seventh year in a row in 2005 as robust demand from the automobile sector negated a consumption drop in the jewelry market.
The price has jumped 58 percent in the past 12 months, and added more than $150, or 13 percent, in the past seven days. "No matter how high platinum goes, there is demand to buy it from end-users, especially from car makers," said Akira Doi, director at Daiichi Commodities. Johnson Matthey will present its views on the market balance and price trends in its report due for release at 1200 GMT on Monday. GOLD GAINS
Gold surged to a new 26-year high of $730.00 an ounce before falling to $716.30/717.30, against $721.60/722.60 in New York.
It hit a record high of $850 in January 1980. Adjusted for inflation that would equate to about $1,500 now.
"We are targeting gold to reach $800 in 2007, but significant weakness in the dollar could deliver that level as early as the third quarter of 2006," J.P. Morgan said in a report.
J.P. Morgan lifted its forecast for gold prices to $669 in 2006 and $756 in 2007 from $566 and $609 respectively.
Gold has risen 40 percent this year and 70 percent in the past 12 months as investors diversify into precious metals as a hedge against global tensions, including those over U.S.-Iran relations, high oil prices and dollar instability.
The U.S. currency fell on Friday, making dollar-priced gold cheaper for holders of other currencies and prompting some investors to shift to commodities.
But some analysts said the metal was vulnerable to a sharp sell-off.
(The well healed funds will always take profits)
"There is now clearly a bubble around the gold market and the latest moves cry for a powerful correction at some stage," said Wolfgang Wrzesniok-Rossbach, head of precious metals marketing at Germany's Heraeus.
In other precious metals, palladium (XPD=) rose to a four-year high of $406 an ounce and was last at $397/402, against $395/400 in New York.
Silver (XAG=) rose as high as $15.05 an ounce, near a 25-year high of $15.17 reached on Thursday, before falling to $14.26. It was last quoted at $14.38/14.48, versus $14.94/15.04. (Additional reporting by Chikafumi Hodo in Tokyo)
Dollar Falls on Concern U.S. Report to Show Wider Trade Deficit
U.S. dollar tumbles against euro, pound
'NEW YORK - The dollar fell to one-year lows against the euro and British pound on Friday despite an unexpected decline in the U.S. trade deficit.'
'In afternoon New York trading, the euro rose to $1.2914, up from $1.2839 late Thursday in New York. The British pound jumped to $1.8932 from $1.8792 the day before.'