LONDON, Feb 12: Platinum hit a record high for the ninth straight trading day on Tuesday as concerns deepened over output losses in top producer South Africa due to a power crisis, analysts said.

Gold fell as much as one per cent as the dollar gained ground versus the euro after Warren Buffett told CNBC television that he had offered to take over the liabilities of municipal bond insurers. But the metal later pared losses.

Platinum rose to a high of $1,965 an ounce before falling to $1,943/1,950 by 1550 GMT, against $1,933/1,941 in New York late on Monday.

“You know that platinum demand is increasing on the back of emission controls and you know that supplies are going to be squeezed. So it just makes sense to be long in this market,” said Johannesburg-based Walter De Wet, analyst at Standard Bank.

“There might be slight over-reaction as everybody is on the bandwagon because of the recent price rise, but there is also some realisation that things are going to get tighter. We believe that the bias is on the upside.”

Platinum’s rally, which has sent prices up 30 per cent in just three weeks, gained pace after Anglo Platinum, the world’s biggest producer, said on Monday the power problem alone would cut output by as much as 120,000 ounces in 2008. It had already cost 30,000 ounces in lost output this year.

Northam Platinum said on Tuesday its production fell 16.5 per cent to 150,755 ounces the July-December period of 2007 from a year earlier and saw its output at the same level in the next six months, provided mines got 90 per cent power.

The market nervously awaits financial results of Impala Platinum, the world’s second-biggest producer of the metal, on Thursday for more cues on total production losses.

“It’s a chronic problem. It has been a deficit market for many years and it looks like it has returned to a significant deficit market again,” said David Holmes, director of metals sales at Dresdner Kleinwort Investment Bank.

Analysts say the platinum deficit could widen to more than 400,000 ounces by the end of 2008, compared with about 265,000 ounces in 2007. —Reuters