Sister-metal palladium rose more steeply. Both are crucial components of anti-pollution systems in motor vehicles. Platinum is widely used in fine jewellery, and palladium jewellery recently became a popular, cheaper alternative.
January platinum at the New York Mercantile Exchange rose $12.50, or 1.3 percent, to $956.20 an ounce. Benchmark futures had not been that high since they were falling from above $1,000 an ounce in 1979.
"I think $1,000, we're going to see what that looks like," said Ralph despotise at RJ Futures. "It may take a while to get there." Spot platinum closed in New York at $950/953.
Buying on the floor accelerated as funds piled in when futures broke above the October 27 high around $953. More stringent global emissions laws and increased production of diesel-powered cars have helped platinum.
While palladium is a more efficient catalyst in gasoline engines, only platinum is used in diesel vehicles. A dealer at a platinum group metal refining company noted that the palladium jewellery market in China has grown from "literally zero" to current estimates of 700,000 ounces in 2004.
Global purchases of palladium for adornment went from 250,000 ounces in 2003 to 920,000 ounces, according Johnson Matthew. "Palladium has got more legs at the moment," he said.
December palladium went up $5.65, or 2.4 percent, to $238.65 an ounce, a 17-month high. Spot palladium was quoted at $233/237. "It's 25 percent the price of platinum.
That's why I think the trade guys will accept delivery on palladium a lot quicker than they will on platinum," despotise said. Palladium rose above $1,000 an ounce in 2001, but more reliable exports from Russia and increased production from South Africa helped prices ease back.
Carmakers got stuck with huge palladium stockpiles and began substituting platinum, which at that time looked cheap in comparison. Traders are watching the platinum-palladium spread, expecting it to narrow from its current $720, the dealer said.
December delivery gold rose $5.20 to $467.50 an ounce, at the Comex division of the Nymex, trading from $461.10 to $469. "I think the impact of the platinum trade on the (Tokyo Commodity Exchange) may have spilled over a little bit in the gold market.
Some of the buying was thought to be trade, investor types, even spec in nature," said James Quinn, commodity commentator at A.G. Edwards. "We've got some resistance at $466 and I think it might struggle to get to that level," he said of December gold.
Spot gold closed at $466.20/467.00 an ounce, against on Tuesday's late quote of $461.20/2.00. London's late fix on Wednesday was at $462.55. December silver was up 5.3 cents at $7.678 an ounce, trading from $7.610 to $7.74.
Spot traded at $7.65/67 an ounce, above $7.57/60 previously. It fixed at $7.65.