PRECIOUS-Platinum hits 4-month high on global economy hopes

Wed Feb 6, 2013 3:28am EST

* Gold in $1,661.39-$1,684.50 range-technicals
 
    * Coming Up: U.S. weekly mortgage market index; 1200 GMT

 (Adds premiums in Tokyo, India's gold move, updates prices)
    By Lewa Pardomuan
    SINGAPORE, Feb 6 (Reuters) - Platinum rose to its strongest
level in four months on Wednesday and palladium held near its
highest since September 2011 on growing hopes the global economy
was on the mend, while gains in equities hurt gold's safe-haven
appeal. 
    Platinum and palladium have outperformed gold so far this
year on an improving economic outlook and after mining
disruptions in South Africa as well as a drop in supply from
Russia triggered fears of a deficit. Both metals are used in
jewellery and auto catalysts.
    Palladium prices are expected to rise to a record average
high this year and platinum prices are seen posting their best
price performance in two years as South Africa's supply problems
worsen and the economic cycle starts to favour industrial
metals, a Reuters poll showed. 
    Platinum hit a high of $1,715.25 an ounce and was at
$1,708.49 by 0813 GMT, up $2.50. It powered to a record $2,290
in early 2008 after a power crisis in main producer South Africa
disrupted mining and sparked fears of a supply deficit.
    Palladium gave up early gains and stood at $760.88 an
ounce, down $2.56. The metal had risen as high as 766.22 an
ounce on Tuesday. 
    "It is quite clear that this year, the demand will (exceed)
supply. I think we are seeing steady buying actually. There's a
steady flow into those metals from investors all around," said
Yuichi Ikemizu, branch manager for Standard Bank in Tokyo.
    "I think we could try $1,750 for platinum and for palladium,
the target is $800," said Ikemizu, referring to the short-term
resistance levels.
    Data showed on Tuesday the vast U.S. services sector
expanded again last month, extending a three-year run of growth,
while European business optimism hit an eight-month high,
suggesting the euro zone economy is starting to recover.
 
    
     Gold slipped $2.04 an ounce to $1,670.56, a drop
partially triggered by news that India's central bank would
consider imposing value and quantity restrictions on gold
imports by banks under extreme conditions. 
    The world's biggest consumer of gold is battling a record
high current account deficit.
     U.S. gold fell $2 an ounce to $1,671.50.   
    The nascent global economic recovery buoyed risk assets from
Asian shares to industrial commodities on Wednesday, while the
prospect of a dovish new governor for the Bank of Japan sent the
yen to a three-year low. 
     A further slide in the Japanese currency spurred buying in
gold futures on the Tokyo Commodity Exchange (TOCOM), with the
most active contract, currently December, hitting a
record for the fifth consecutive day at 5,073 yen a gram. 
    "My office in Tokyo told me there's buying in Japan, but
it's pretty quiet here. Gold has been trading sideways for a
while," said a dealer in Singapore, referring to cash gold.
    "Premiums are still the same from last week at $1.20.
There's regular supply, so we don't need to adjust them," said
the dealer, referring to the premiums for local gold bars
against London prices. 
     But in Tokyo, gold bars were offered at discounts of
between 75 cents to $1 below the spot London prices because of
gains on TOCOM. "The demand from industrial side is very weak,
unfortunately," said a dealer in Tokyo.
    Hong Kong's net gold flow to mainland China jumped 47
percent in 2012 to a record high of 557.478 tonnes, indicating
robust demand in China, which vies with India to be the world's
top gold consumer. 

  Precious metals prices 0813 GMT
  Metal             Last    Change  Pct chg  YTD pct chg    Volume
  Spot Gold        1670.56   -2.04   -0.12     -0.24
  Spot Silver        31.69   -0.09   -0.28      4.66
  Spot Platinum    1708.49    2.50   +0.15     11.30
  Spot Palladium    760.88   -2.56   -0.34      9.95
  COMEX GOLD APR3  1671.50   -2.00   -0.12     -0.26        14577
  COMEX SILVER MAR3  31.71   -0.16   -0.52      4.90         3618
  Euro/Dollar       1.3524
  Dollar/Yen         93.69
 
  COMEX gold and silver contracts show the most active months
 
        

 (Editing by Muralikumar Anantharaman and Miral Fahmy)