LONDON, Feb 4: Platinum roared to a record high and palladium hit a six-year peak on Monday as supply concerns persisted in top producer South Africa, facing an electricity crisis, analysts said.

Gold and silver lagged behind after setting new peaks on Friday as the metals consolidated gains before starting their march again to scale new highs, they added.

South African mines that produce four-fifths of the world’s platinum made slow progress in bringing back production after the state power firm allowed them only limited increases to their electricity consumption.

The platinum price has been driven to record levels by the problems with flooding and power shortages in South Africa. This has seen strong investor buying, Tom Kendall, precious metals strategist at Mitsubishi Corporation, said.

Although 90 per cent of power has been restored to the mines, the impact on production has yet to be fully determined.

That said, the price is due for a correction from current inflated levels and with most Chinese buyers on holiday, any correction may be steep. Platinum hit a high of $1,789 an ounce before falling to $1,780/1,785 at 1109 GMT, against $1,752/1,759 late in New York on Friday. Palladium rose to $420.50/423.50 an ounce from $410/413, tracking gains in platinum prices.

The benchmark platinum futures contract on the Tokyo Commodity Exchange also touched a record high of 5,870 yen per gram. It ended at 5,868 yen, up 187 yen from Friday’s close.

Platinum and palladium are used in jewellery and in vehicle catalysts, where they help clean exhaust gases.Despite the relatively quick restoration of at least some production, one should not underestimate the production loss and its implications on this year’s supply-demand balance, Wolfgang Wrzesniok-Rossbach, head of sales at Germany’s Heraeus, said.

With a loss of around 15,000 ounces a day due to the power cut and another 50,000-70,000 ounces due to flooding at one of the mines of Anglo Platinum, a total of 150,000 ounces might have been lost. As a result, the annual deficit could climb this year above 400,000 ounces — the highest in 6 years, he said.

Gold prices fell 1 per cent or more on profit-taking, but the market remained convinced that the metal might advance well beyond Friday’s record high of $936.50 during 2008.

Spot gold fell as low as $896.80, the lowest since Jan. 24, before paring losses. The metal was last quoted at $898.90/ 899.80, still down from $910.00/ 910.75 late in New York.

In other bullion markets, US February gold futures fell $10.9 an ounce to $902.60 in electronic trade.

Silver fell to $16.65/16.70 from $16.75/16.80 an ounce in New York on Friday, when it hit a 27-year high of $17.27 an ounce. —Reuters