UPDATE 7-Platinum retreats after historic high, gold eases

(Updates with quotes, closing prices, market activity, adds NEW YORK to dateline)

By Frank Tang and Atul Prakash

NEW YORK/LONDON, Feb 22 (Reuters) - Platinum powered to an historic high near $2,200 an ounce on Friday as supply problems in top producer South Africa triggered speculative buying, but erased gains later on profit-taking.

Bullish sentiment also helped gold to advance and trade near Thursday's record high above $950 an ounce, but finished lower as investors consolidated recent solid gains ahead of the weekend, but dealers said bullion still has leg to go higher next week. Silver also scaled a 27-year peak.

Spot platinum XPT= jumped to a record high of $2,192 an ounce before falling to $2,148/2,153 an ounce at 3:18 p.m. EST (2018 GMT), lower than New York's late Thursday quote of $2,151/2,161.

The active U.S. NYMEX platinum contract for April delivery PLJ8 closed down $20.40 to $2,167.80 an ounce.

"It's a long-term problem in South Africa and that's going to affect the platinum market for years to come. But for now, it looks like it's taking a breather," said Simon Weeks, managing director of precious metals at Bank of Nova Scotia.

Platinum, used in jewellery and auto catalysts, has jumped more than 40 percent this year after mines in South Africa, accounting for 80 percent of world output, were shut for five days at the height of last month's power crisis.

South African power utility Eskom said it had contracted 30 million tonnes coal of the 45 million tonnes it needs over the next two years to help resolve a crippling power crisis.

"The market is not yet sure how much platinum will be available this year and the next year. While prices have adjusted already, there might be further adjustments if we realise that the supply is going to be even lower than expectations," said Frederic Panizzutti, analyst at MKS Finance.

Analysts say the global platinum deficit could widen to 500,000 to 600,000 ounces by the end of 2008, compared with about 265,000 ounces in 2007. The market had a surplus of 65,000 ounces in 2006, following seven successive years of deficits.

Meanwhile, investment demand remained robust for platinum. London-based ETF Securities said on Thursday its platinum exchange traded commodity fund (PHPT.L) had more than doubled its holdings of the precious metal to 302,000 ounces since the start of January. [ID:nL21837945]

GOLD OUTLOOK BRIGHT

In other precious metals, gold XAU= rose to a high of 949.40 an ounce before falling as low as $935.30. It was at $943.70/944.50 by New York's last quote at 2:15 p.m., against $944.40/945.20 in U.S. market late on Thursday, when it hit a record of $953.60.

The gold contract for April delivery at the COMEX division of the New York Mercantile Exchange GCJ8 settled down $1.40 at $947.80 an ounce.

"Certainly there are a lot of positive, bullish factors out there for gold, still. But we've had a big run-up recently and there seems to be some profit taking," said Patrick Fearon, precious metals analyst of A.G. Edwards & Sons in St. Louis.