Platinum, Palladium Gain as Gold Rises to Record on Dollar Drop

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"The U.S. dollar is taking an incredible beating."

Platinum and palladium prices climbed as gold surged to a record after the dollar weakened, prompting purchases of the metals as alternative investments.

Some investors buy precious metals to preserve value when the U.S. currency declines. The dollar fell as much as 0.7% against the euro, weakening for a third straight session. Gold jumped on speculation that the greenback may lose its place as a global reserve and trading currency, accelerating inflation.

"The U.S. dollar is taking an incredible beating,"’ Miguel Perez-Santalla, a Heraeus Precious Metals Management sales vice president in New York, said in a note. "Gold has gotten a tremendous boost on this. The other metals rallied along."’

Platinum futures for January delivery rose $18.80, or 1.4%, to $1,320.60 an ounce at 10:38 a.m. on the New York Mercantile Exchange. Before today, the most-active contract gained 38% this year.

Palladium futures for December delivery advanced $3.15, or 1%, to $306.45 an ounce. Through yesterday, the price climbed 61% this year.

Canaccord Capital Corp. has raised its platinum forecast to $1,350 an ounce for the current quarter from $1,250, mainly because of the rising value of the South African rand compared with the dollar, analysts Tyler Broda in Vancouver and Damien Hackett in London said today in a report. Most of the world’s platinum comes from mines in South Africa.

The analysts said the metal is forecast to be at $1,450 an ounce in the second half of 2010.

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