Gold firms, platinum climbs to six-month high

A salesman arranges gold bracelets inside a jewellery showroom in Jaipur, capital of India's desert state of Rajasthan January 12, 2009.

NEW YORK/LONDON (Reuters) - Gold ended higher after a volatile session on Thursday, underpinned by growing investment appetite and gains in other commodities such as oil and metals.

Platinum rose to its highest price in six months as dollar weakness over the past couple of days prompted industrial and bargain-hunting buying, lifting palladium by nearly 6 percent to a four-month high.

But analysts said with sales sharply down in the auto sector, the main consumer of platinum, the rally lacked fundamentals to support it and was seen short-lived.

Spot gold was at $938.05 an ounce at 3:00 p.m. EDT, up 0.5 percent from its last quote $933.15 in New York late Wednesday.

U.S. gold futures for April delivery settled up $4.20 at $940.00 an ounce on the COMEX division of the New York Mercantile Exchange.

"Money keeps pushing into commodities on concerns over the money supply in the United States," said John Meyer, head of resources at Fairfax. "Gold is a popular place to be right now."

Gold is used as a hedge against financial uncertainty and against inflation, which is expected to soar because of the vast amounts of money being piped into the global economy by central banks and governments.

The U.S. plan to buy long-dated Treasuries further raised those inflationary concerns and have also dented the outlook for the dollar, which in turn is supportive for bullion.

But on Thursday, the dollar rebounded against the euro in volatile trade.

James Steel, chief commodities analyst at HSBC, said that gold was sensitive to dollar movements, and that gold would benefit if the greenback's world reserve currency status was seriously challenged.

In exchange news, CME Group Inc said on Thursday it will launch mini gold kilogram and mini silver 1,000 ounce futures contracts, in response to rising interest among investors.

PLATINUM GROUP METALS RISE

The U.S. economy contracted slightly more than previously estimated in the fourth quarter, pulled down by falling consumer spending and exports, while corporate profits plunged by the biggest margin since 1994.

Platinum group metals, however, rallied on enthusiasm after a senior U.S. senator said the Obama administration task force was likely to recommend more aid for the automakers.

Spot platinum touched $1,159.00 an ounce, its highest since September 26. It was last at $1,141.00 an ounce, up 1.9 percent from its previous close of $1,120 an ounce late in New York on Wednesday.

Platinum's strength lifted sister metal palladium nearly 6 percent higher to $226.50 an ounce, its highest since November 11. It was at $220.50 an ounce, up 5.8 percent from its previous finish of $208.50 an ounce.

Spot silver was at $13.58 an ounce, up 0.8 percent from its previous finish of $13.45 an ounce.

The poor state of the global economy has boosted investment appetite for gold since the start of the year, with holdings in the world's largest exchange-traded fund hitting consecutive record highs.

For details on the gold holdings of the ETF listed in New York and co-listed on other exchanges, click on:

here

For a graphic, click on: here

(Additional reporting by Chikako Mogi in Tokyo; Editing by Lisa Shumaker)