PRECIOUS-Gold regains premium over sagging platinum

Wed Jan 16, 2013 9:47am EST

* Gold prices edge back above those of platinum

* Buyers cash in gains in platinum but Amplats underpins

* Anglo American Platinum workers down tools (Updates prices)

By Clara Denina

LONDON, Jan 16 (Reuters) - Gold prices regained their premium over platinum on Wednesday as the white metal surrendered some of the previous session's hefty gains, which had taken it to three-month highs on rising supply concerns from major producer South Africa.

Platinum rallied for a sixth straight day on Tuesday after the world's number one producer of the metal, Anglo American Platinum, announced that an operational overhaul would cost 14,000 jobs and an estimated 400,000 ounces of production.

It hit a high of $1,699.50 an ounce on Tuesday, but retraced some of that rise on Wednesday, while gold held its ground.

Spot gold was little changed at $1,676.04 an ounce at 1434 GMT against $1,678.50 late on Tuesday, while spot platinum was down 0.4 percent at $1,671.50 an ounce. The two metals hit parity for the first time since March on Tuesday.

"The trend in gold and platinum has been aggressively upwards in recent sessions," Standard Chartered analyst Dan Smith said. "We (saw) a little bit of dollar strength today and platinum is running through a strong technical resistance and also some profit-taking.

"It's just a consolidation of recent gains but any pullback in platinum should however be seen as a buying opportunity for consumers at the moment."

Platinum was however still firmly underpinned by news that Amplats staff had downed tools on Wednesday, with the company saying workers were on illegal strike at three of its South African mines.

South African mining minister Susan Shabangu reiterated the government had not been consulted by the miner regarding its plans. South African platinum production was hit last year by a wave of strikes, some of which led to deadly violence.

Speculation that Amplats' overhaul may cost fewer platinum ounces than originally suggested prompted some investors to cash in gains.

"Our equity analysts view the net impact on the platinum market balance to be smaller, at about 250,000 ounces, which fits quite well with what the market was expecting," UBS analyst Joni Teves said in a note.

"It is not a huge surprise that the $1,700 psychological mark offered decent resistance, given platinum has not really been able to sustain prices above this level since the September 2011 selloff," she added.

AUTO SALES FALL

The impact of supply disruptions on platinum prices has been cushioned by weakness on the demand side, particularly in terms of automotive buying, the biggest segment of consumption.

EU auto sales fell 16 percent year-on-year to 838,428 vehicles in December, posting the biggest decline in over two years, according to the European Automobile Manufacturers' Association (ACEA).

The European cars market is diesel-dominated, where engines use a higher loading of platinum to clean up exahust emissions.

From a chart perspective, gold prices are likely to meet resistance at around $1,690 an ounce, according to analysts who study past price moves to determine the future direction of trade.

Other precious metals were little changed, finding support from expectations that the world's leading central banks will continue their ultra-loose monetary policies and positive economic figures from China.

Spot palladium was up 0.4 percent at $711 an ounce, easing from Tuesday's intra-day high of $717.50, a level unseen since early March 2012. Spot silver was down 0.4 percent at $31.23.

"Precious metals are relatively robust against a firmer U.S. dollar," Commerzbank analyst Daniel Briesemann said. "There may be some consolidation throughout the day but I wouldn't say prices can fall considerably in the next couple of days." (Editing by Jan Harvey and Keiron Henderson)

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