Platinum, Palladium Soar in N.Y. as Oil Rises, Dollar Weakens By...

Platinum, Palladium Soar in N.Y. as Oil Rises, Dollar Weakens
By Halia Pavliva

July 11 (Bloomberg) Platinum jumped in New York by the most in two weeks, pacing gains in gold, silver and palladium as oil climbed to a record and the dollar weakened, encouraging investors to buy precious metals to preserve value.

Crude-oil futures soared as much as 4 percent, climbing past $147 a barrel for the first time on concerns that Israel may attack Iran. The dollar dropped to within 1 cent of its record of $1.6019 per euro. Some investors buy precious metals to preserve value when the dollar weakens and oil rises, spurring inflation concerns.

“Platinum is driven by the whole precious metals complex and is leaning heavily on gold,” said James Steel, an analyst at HSBC Securities in New York. “The outlook is positive for platinum, as well as for the complex in general.”

Platinum futures for October delivery rose $48.80, or 2.4 percent, to $2,047.20 an ounce on the New York Mercantile Exchange, the biggest one-day increase since June 26 and a 0.8 percent advance for the week. The metal has gained 34 percent this year, compared with a 33 percent increase in 2007.

“Platinum is my favorite precious metal, because it has tight - and the most-compelling - fundamentals,” Steel said.

Platinum reached a record $2,308.80 on March 4, partly because of output disruptions from South Africa, the source of 78 percent of the world's supply last year. Output of platinum has trailed demand in eight of the past nine years, according to Johnson Matthey Plc, a London-based metals trader and manufacturer.

Palladium Gains

Palladium futures for September delivery rose $5.80, or 1.3 percent, to $457.80 an ounce in New York. Still, the metal fell 1.1 percent from last week. Most-active futures rose 21 percent this year, compared with a 12 percent gain in 2007.

Platinum and palladium are mostly used in auto catalysts and jewelry. Gold futures jumped as much as 2.9 percent, while silver advanced as much as 3.6 percent in New York.

The UBS Bloomberg Constant Maturity Commodity Index of 26 futures gained as much as 2.2 percent. The Reuters/Jefferies CRB Index of 19 contracts rose as much as 1.6 percent.

“Commodities have exploded to the upside again as investment money runs from the beleaguered financial markets and concerns of company failures loom in the wings,” Miguel Perez-Santalla, a sales vice president at Heraeus Precious Metals Management in New York, said in an e-mailed research note.

U.S. equity indexes plunged on speculation that the two largest mortgage-financing companies, Fannie Mae and Freddie Mac, may be rescued from collapse by the government.