--Nymex platinum for April delivery up 1.3% at $1,729.80/troy oz
--Platinum, palladium march higher amid fears of a supply shortfall
--Platinum prices extend leadership over gold to $54.60/troy oz.
By Tatyana Shumsky
NEW YORK--Platinum futures advanced to their highest level in more than a year, while palladium set fresh multi-month highs, amid ongoing concerns about South African supply of the precious metals.
Platinum for April delivery, the most active contract, was recently up $22.60, or 1.3%, at $1,729.80 a troy ounce on the New York Mercantile Exchange. The contract touched an intraday high of $1,744.50 a troy ounce, the highest price since Sept. 22, 2011.
Platinum and palladium prices continued to draw strength from international focus on South Africa's platinum mining industry. The country dominates global output of both precious metals, which are often found together.
Analysts and industry members say that factors like a strong rand, the rising cost of electrical power and demand for higher wages has made much of south Africa's platinum mining unprofitable. This has sparked talk of widespread mine closures and raised concerns about a supply shortfall.
Investors have been flocking to platinum since the start of the year. Platinum-backed exchange-traded funds, which buy and store the physical metal on behalf of investors, added 140,000 troy ounces of the white metal in the year through Feb. 1, according to data from metals consultancy CPM Group.
ETF holdings of platinum's sister metal palladium are up 220,000 ounces in the same period, according to CPM Group.
"A lot of it is bullish sentiment among investors. This year they've identified platinum and palladium as the winners," said Erica Rannestad, commodity analyst with CPM Group.
Both precious metals also benefited from rising car sales, especially in the U.S. and China. The majority of platinum and palladium produced goes into making exhaust filters for the automotive industry.
The rally has also helped lift platinum prices above gold, with an ounce of platinum recently trading at a $54.60 premium to the yellow metal.
"Platinum is regaining its rightful leadership over gold," said George Gero, vice president with RBC Capital Markets Global Futures. "Within a year this spread has moved from under $200 to substantially over," he added.
Palladium futures also set fresh multi-month highs, climbing to $772.90 a troy ounce, its highest traded price since Sept. 2, 2011.
Nymex palladium for March delivery was recently up 15 cents at $765.60 a troy ounce.