* Gold dips after upbeat U.S. data, dollar pares losses
* South Africa supply concerns underpin platinum group
* Palladium rises to 16-month high at $726.50/oz
(Updates prices, adds comment)
By Clara Denina
LONDON, Jan 17 Platinum and palladium prices hit
multi-month highs on Thursday after upbeat U.S. housing and jobs
data sparked a rise in U.S. stocks to five-year highs, cut early
losses in the dollar index and boosted appetite for commodities.
Supply concerns from major producer South Africa also
continued to drive prices higher, after miner Anglo American
Platinum announced an overhaul that it said could cost
it 400,000 ounces of platinum production a year.
Spot platinum hit a high of $1,701.50 and was up 0.8
percent at $1,696.99 an ounce at 1538 GMT, while spot palladium
was up 0.3 percent at $723.22 an ounce, having earlier
hit a 16-month high of $727.
Amplats miners returned to work after an illegal walkout to
protest against the world's top platinum producer's plan to cut
14,000 jobs, close two mines and sell another.
But analysts were still positive on platinum group metals,
with platinum staying close to parity with bullion as demand for
use in auto emissions was seen improving in China and the U.S.
amid constrained supply.
"Potential for further supply shocks in the PGMs does have
all the ingredients for an interesting few weeks in terms of
prices," INTL Commodities CEO Jeff Rhodes said.
"I think the premium of platinum over gold, once it gets
through parity, will pick up momentum and there is a significant
chance of platinum moving back to a normal type of premium of at
least $100," he added.
Data released on Thursday showed the number of Americans
filing new claims for unemployment benefits tumbled to a
five-year low last week, while groundbreaking to build new U.S.
homes accelerated in December to its fastest pace in over four
Other metals like copper and crude oil rose after the
numbers. Gold prices initially fell to a session low of
$1,665.94 an ounce after the data, but regained that ground as
U.S. stocks and other commodities rallied.
Gold moved back above its 200-day moving average this week,
a key chart level, after falling below that level in early
January after minutes of a Federal Reserve policy meeting
showing concern about the scope of monetary easing.
"We are still in a period of trial, trying to rebuild the
confidence into the gold market," Saxo Bank vice president Ole
Hansen said. "We have not breached any critical levels yet to
the upside, which could signal that further strength could be
"While we still stay above the 200-day moving average around
$1,662, there is a lot of nervousness in the market," he added.
"We've seen big swings at the start of January, we spent the
last week trying to recover from that."
Spot gold was up 0.6 percent at $1,672.09 an ounce,
while U.S. gold futures for December delivery were up
$4.50 an ounce at $1,687.70.
Dealers said physical buying interest, which had been strong
at the start of the month in several Asian countries, ebbed.
"What we did see in the gold dips was strong physical demand
across the Asian world including Thailand and India but since
the rally back to current levels the physical market has
definitely slowed," INTL's Rhodes said.
Silver stood at $31.69, up 0.9 percent.
(Additional reporting by Jan Harvey; Editing by Veronica Brown
and Alison Birrane)