Platinum took a mad dash upward earlier today, breaking another new record of $1,803.80 an ounce on the New York Mercantile Exchange (NYMEX). Investors watching the power shortage problems in South Africa, who produce four-fifths of the world’s platinum, bet on a constricting supply.
“Mine output disruptions continue to fuel the rally” in platinum, Jon Nadler, senior analyst for Kitco Bullion Dealers Montreal said in a research note. “With 80 percent or so of global supplies coming from the very mines affected by electricity woes, this is not a surprise.”
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The Federal Reserve sliced interest rates by a half-percentage point Wednesday, another significant cut that follows on the heels of the emergency three-quarter percentage point reduction just eight days ago on Jan. 22.
The federal fund rate, an overnight bank lending rate that affects how much interest consumers pay on credit cards, home equity lines of credit and auto loans, was cut to 3.0% from 3.5%.
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Platinum hit a record high as strong industrial demand and supply fears drove investors to buy.
Spot platinum made it to $1,519 an ounce, breaking the $1,500 barrier for the first time on Monday.
It then pulled back slightly for the night, yet was still sitting at $1507 an ounce at 2:20 p.m. (ET on Tuesday).
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