UPDATE 7-Platinum ends sharply higher on ETN launch, gold up

(Recasts, adds analyst comments, closing prices, adds NEW YORK to dateline)

By Frank Tang and Atul Prakash

NEW YORK/LONDON, May 9 (Reuters) - Platinum ended sharply higher on Friday as the launch of U.S. platinum exchange-traded notes boosted sentiment, while gold also finished up on record crude oil prices.

Investment bank UBS (UBSN.VX) launched two ETNs offering long and short trading strategies in platinum. ETNs, unlike exchange-traded funds, do not purchase physical platinum to back the number of shares sold. [ID:nN09540232]

The two ETNs -- UBS E-Tracs Long Platinum ETN (PTM.P) and UBS E-Tracs Short Platinum ETN (PTD.P) -- started trading on Friday on the NYSE Arca platform.

"It won't have an impact on the availability of physical metal nor on lease rates. Fundamentally you cannot justify the kind of price move we have seen," said Tom Kendall, metals strategist at Mitsubishi Corporation.

But it offers another route by which U.S. mutual and pension funds, which cannot directly invest in commodity derivatives, can gain exposure to platinum, he added.

Spot platinum XPT= rose to a high of $2,095 an ounce and was last at $2,074/2,094 by New York's last quote at 2:15 p.m. EDT (1815 GMT), compared with $2,008.50/2,028.50 in New York late on Thursday.

U.S. July platinum contract PLN8 on the New York Mercantile Exchange ended up $59.50, or 2.9 percent, at $2,101.80 an ounce.

Ralph D'Esposito, COMEX floor trader at RJ Futures in New York, said the ETN news gave platinum an additional boost this week, and he also cited strong support from the physical platinum market and robust buying by the trades.

Dealers also reported platinum purchases in Japan and Europe as auto makers stocked up for their second-quarter requirements, but the metal was still more than $200 below a lifetime high of $2,290 an ounce hit on March 4.

"People just read about the new products and started buying platinum, but I think it's overdone here," said Wolfgang Wrzesniok-Rossbach, head of marketing and sales at Heraeus, a German precious metals trading group.

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Platinum's major industrial use is in making autocatalysts, particularly diesel catalysts, as it helps clean environmentally damaging fumes from exhausts. It is also used in jewellery.

"While the UBS ETNs do not directly invest in the underlying, the reality is that the market makers of the product need to hedge their short exposure to investors who are very likely to be long given the bullish medium term outlook," J.P. Morgan said in a report.

"As such we can expect that investors and market makers will continue to be net buyers of platinum."