from bloomberg:Platinum Jumps to Highest Since October on...

from bloomberg:

Platinum Jumps to Highest Since October on Investment Demand
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By Halia Pavliva

Feb. 10 (Bloomberg) -- Platinum futures jumped more than 5 percent to the highest in almost four months on demand for the metal as a store of value. Palladium also climbed.

The precious metals, including gold and silver, rallied this year as global equities fell amid a recession. Government stimulus plans spurred inflation concerns, triggering demand for the commodities as a hedge against the prospect of resurgent consumer prices. President Barack Obama signaled he would be open to seeking an expansion of a $700 billion rescue program.

“Platinum exploded,” Miguel Perez-Santalla, a sales vice president at Heraeus Precious Metals Management in New York, said in an e-mail. “Investment money in anticipation of the influx of currency from the stimulus package continues to seek homes for what they believe will be inflationary activity.”

Platinum futures for April delivery rose $44.80, or 4.5 percent, to $1,040.70 at 9:43 a.m. on the New York Mercantile Exchange. Earlier, the price reached $1,047.80, the highest since Oct. 14. Before today, the metal climbed 5.8 percent this year.

Palladium futures for March delivery jumped $9.35, or 4.5 percent, to $215.20 an ounce. Before today, the price gained 9.1 percent this year.

The metals are used mostly in jewelry and pollution-control devices in cars.

“Though the fundamentals remain weak, there is no doubt that the investment sector has taken over as the biggest consumer, created a floor and will continue to drive the prices higher until something better comes along,” Perez-Santalla said.

The platinum price may top $1,100, he said.

Before today, the MSCI World Index of equities dropped 4.7 this year.

In 2008, platinum tumbled 38 percent and palladium plunged 50 percent as auto sales plummeted.

To contact the reporter on this story: Halia Pavliva in New York at [email protected].