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. (AMS) 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 percent 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 1.9 percent to settle at $1,689.90 an ounce at 1:15 p.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 gained 9.6 percent this month, compared with last year's 9.8 percent advance.
David Fuller's view Presumably, this is a temporary measure,
triggered by South Africa's protracted and violent miner's strike, exacerbated
by union rivalry. However, it is part of an increasing mining problem, not least
for relatively scarce supplies of precious metals. Miners are having to spend
more but are often mining less ore, contributing to a shortage of precious metals
relative to demand.
Fullermoney has frequently reported on these developments, often in conjunction with informed comments from the Collective of Subscribers. Here is a sample from Monday 1st October. (See also a chart of platinum below, in the Subscriber's Area.)