NEW YORK --Gold and platinum prices reached new highs Friday after mine stoppages in South Africa, a leading producer of the precious metals, led to buying on supply concerns.
Several major mining companies, including AngloGold, Harmony and Gold Fields Ltd., suspended all but emergency operations at some of the world's largest mines because of a national electricity emergency. Other commodities joined the rally, with oil closing above $90 a barrel for the first time in a week.
South Africa is second only to China in world gold production, and is the globe's top producer of platinum. Mine equipment problems, accidents and maintenance have contributed to a production decline this year, however.
Mining operations in the country were suspended Friday on fears that power interruptions would trap workers underground. Gold Fields said it halted all its South African operations, including in the world's largest gold mine, which produces 7,000 ounces per day.
The government said there was no foreseeable end to the electricity shortages.
"People will take this type of news and they look for direction," said Carlos Sanchez, an analyst with CPM Group in New York. "So this was bad for supply and many took that as a sign for, 'Let's buy precious metals.'"
An ounce of gold for February delivery spiked to $924.30, a fresh record, on the New York Mercantile Exchange before easing back to settle at $910.70, up $4.90.
Still, when adjusted for inflation, gold remains well below its all-time highs in 1980. An ounce of gold at $925 then would be worth about $2,360 today.
April platinum peaked at a new high of $1,694.90 an ounce. Prices later settled at $1,670, up $57.
Platinum prices have roughly doubled in four years, with global inventories growing tighter as automakers try to meet demand, particularly in Asia and Eastern Europe. Demand for the metal, used in jewelry and catalytic converters in automotive exhaust systems, has also surged due to stricter emissions standards.
March silver climbed 15.7 cents to settle at $16.490 an ounce, while copper added 1.25 cent to $3.1840 a pound.
Investors also rushed to buy precious metals ahead of the Federal Reserve's two-day meeting beginning Jan. 29. The central bank is expected to cut interest rates again following Tuesday's emergency 0.75 percentage point cut.
Lower interest rates would likely undercut the dollar and boost metals prices. A weaker U.S. currency makes dollar-denominated commodities more attractive to investors, especially overseas buyers.
The euro fell against the dollar late Friday, fetching $1.4669.
Also, investors could view another rate cut as confirmation by the Fed that the staggering U.S. economy is in need of drastic reinforcement, adding to gold's appeal as a safe asset.
Rising oil prices further boosted gold, which investors turn to as a hedge against inflation.
Light, sweet crude for March delivery rose $1.30 to settle at $90.71 on the New York Mercantile Exchange.
Recent efforts by the Federal Reserve and Congress to jump-start the economy appeared to console oil investors who have worried that flagging growth would weaken demand for crude.
In other trading, agricultural futures closed higher on the Chicago Board of Trade.
Wheat for March delivery jumped 24 cents to $9.33 a bushel and March corn climbed 9 cents to $4.9825 a bushel. March oats added 3.75 cents to $3.2025 a bushel, while March soybeans rose 12.5 cents to $12.43 a bushel.
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