Platinum powers to record $1 850

London - Platinum spiked to a new historic high for the sixth trading day on Thursday, as investors flocked in to snap up the metal on deepening concerns over supply from top producer South Africa.

Bullish sentiment in the precious metals market, along with a weaker dollar, lifted other metals, with palladium hitting a six-year high, gold rising more than 1% towards recent record highs and silver extending gains.

Spot platinum rose to a high of $1,850 an ounce before falling to $1 841/1 848 at 11;17 GMT, against $1 810/1 815 in New York late on Wednesday.

"People are now talking about a very significant supply deficit yet again for platinum in 2008 and this is a problem that is not going to go away in a hurry," said Ross Norman, managing director at TheBullionDesk.com.

"Platinum is a very, very thin market in the sense that there's very little metal between the miner, the refiner, the fabricator and industrial clients."

"With the investment buying coming in, being a thin market, it pushes the price massively higher," he said.

South Africa has appealed to mining companies for help in cutting power consumption to ease a power crisis caused by the failure of electricity generation to match economic growth.

Platinum producers in the country, which accounts for more than three-fourths of global output, are still facing power problems after halting mining operations for five days in January and losing significant production.

"There seems to be increased nervousness in the market. There is no doubt that given what happened in the first quarter so far, we are likely to have another deficit this year," said Jeremy Coombes, general manager at Johnson Matthey, the world's largest refiner and fabricator of platinum.

"There is some investor activity and there were some ETF purchases last week."

London-based ETF Securities now holds more than 210 000 ounces of platinum in its exchange-traded fund (ETF), backed by physical platinum.

The market witnessed a deficit of 265 000 ounces of platinum in 2007 and analysts said the shortfall between demand and supply might jump to 300 000 to 400 000 ounces this year.

Demand for platinum jewellery had badly suffered because of high prices and New Year holidays in China, the world's top consumer of platinum jewellery, traders said.

Firmness in platinum prices boosted gold prices. Spot metal rose as high as $911.00 before easing to $909.60/910.30 an ounce, against $900.40/901.10 late in New York on Wednesday.

The metal hit a record $936.50 on February 1.

Palladium rose to a high of $429 an ounce and was last quoted at $425/430, versus $416/421 on Wednesday.

Comex gold futures extended gains after rising 1.7% in New York on Wednesday. The April contract was up $9.5 at $914.50 from the New York settlement.