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Platinum Extends Rally on Supply Concern Amid Cutifani Comments

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Platinum Supply Falls to 13-Year Low as Mines Close
Five and ten gram platinum bars are arranged for a photograph. Global production of the metal will fall as South African output drops 3.4 percent to a 12-year low of 4.11 million ounces, Barclays estimates. Photographer: Kerem Uzel/Bloomberg

Feb. 7 (Bloomberg) -- Platinum gained for a fifth day to the highest level in more than 16 months on increased concern that supplies will decline from South Africa, which produces of about 73 percent global output.

Platinum for immediate delivery rose as much as 0.3 percent to $1,742 an ounce, the most expensive since Sept. 22, 2011, and was at $1,736.12 at 8:01 a.m. in London. Spot gold was little changed at $1,677.60 an ounce. The gap between the two metals, at $58.52 today, ended at $58.55 yesterday, the widest since August 2011, according to data compiled by Bloomberg.

Mark Cutifani, who’ll become chief executive officer of Anglo American Plc in April, said today there are “a number of issues” in the platinum industry, according to comments before a speech in Cape Town. Cynthia Carroll, the executive Cutifani is replacing, said on Feb. 5 the industry is in crisis. World output will drop 2.7 percent to 5.68 million ounces this year, the least since 2000, amid labor unrest in South Africa and plans by producers including Anglo American unit Anglo American Platinum to idle or close shafts, according to Barclays Plc.

“Platinum is at the forefront of precious metals investors’ minds because of supply issues in the world’s biggest producer,” said Gavin Wendt, a senior resource analyst and founder of Mine Life Pty in Sydney. “There’s sound reasoning for people to be putting their money into platinum.”

Assets in exchange traded-products backed by platinum stood at 51.45 metric tons yesterday from a record 51.46 tons on Feb. 5, data compiled by Bloomberg show. The holdings have risen 10 percent this year. One ounce of platinum bought as much as 1.0374 ounces of gold, according to data tracked by Bloomberg.

ECB Meeting

Gold for April delivery was little changed at $1,678 an ounce on the Comex in New York. Cash bullion of 99.99 percent purity rose 0.3 percent to 338.02 yuan a gram ($1,685.47 an ounce) on the Shanghai Gold Exchange. Futures gained 0.2 percent to 30,771 rupees per 10 grams ($1,799.83 an ounce) on the Multi Commodity Exchange of India Ltd.

European Central Bank policy makers meet today to assess monetary policy amid political turmoil that threatens to renew the region’s sovereign-debt crisis. The Dollar Index, a gauge against six counterparts, climbed for a second day. Gold usually trades counter to the U.S. currency.

Spot palladium climbed 0.3 percent to $765 an ounce, while silver for immediate delivery dropped 0.2 percent to $31.775 an ounce.

To contact the reporter for this story: Phoebe Sedgman in Melbourne at psedgman2@bloomberg.net

To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

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