NEW YORK — Gold prices jumped to their highest level in almost three years Tuesday and platinum soared to a five-year high on continued fears that unrest will disrupt supplies from South Africa.
"It's a continuation of the strong rally we've had in platinum and gold for the past few months," said John Norris, Citibank's head trader for precious metals.
"A fear of disruption of supplies in South Africa if the situation worsens has fueled investor interest in both metals and still is the primary reason for the strength in all the precious metals," Norris said.
Platinum spurted more than $38 an ounce, and gold jumped more than $18 an ounce. South Africa produces much of the world's supply of both metals.
Analysts also attributed the rally to the resumption of trading after a long weekend, big price gains in Europe on Monday, the declining dollar, lower interest rates, a relatively weak stock market, higher oil prices and concerns about the Middle East.
"We've seen a broadening in the interest," Norris said. "Of course, as metals go up quickly, they attract the interest of the public, and that has brought quite a few people . . . into the market over the last few weeks--and particularly today."
William O'Neill, research director of Elders Futures, said there was aggressive industrial demand for platinum as well as investor interest.
"Trading was hectic. We had very good volume," especially in platinum, O'Neill said.
Platinum for current delivery closed up $38.40 at $663.20 an ounce on the New York Mercantile Exchange. The exchange said it was the highest level since December, 1980, and the largest daily price jump of the year. All platinum contracts for future delivery rose $25, the limit allowed.
Gold soared $18.10 to close at $405.70 an ounce on the Commodity Exchange. That was the highest level since gold closed at $411 on Sept. 28, 1983, the exchange said. It was the largest one-day increase since gold jumped about $35 an ounce on March 19, 1985, it said.
Bullion was quoted at $405.50 an ounce at 4 p.m. EDT at Republic National Bank in New York, up $17.75 from Friday's late bid.