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UPDATE 5-Platinum rises on bargain-hunting, gold weakens

 * Platinum up, gold drops with choppy stock market
 * Platinum producer Lonmin closes some high-cost mines
 * JM says platinum prices could fall to $700/oz
 (Recasts, updates prices, market activity to New York close;
adds second byline, dateline, previously LONDON)
 NEW YORK/LONDON, Nov 18 (Reuters) - Platinum ended nearly 2
percent higher on Tuesday, lifted by bargain-hunting after a
major producer announced mine closures, but gold prices turned
lower as a volatile stock market prompted selling.
 Platinum rose on news of Lonmin LMI.L, the world's
third-biggest platinum producer, closing some high-cost mines
and cutting costs to survive a market downturn. [ID:nLI461697]
 Spot platinum XPT= was at $822.50 an ounce at 3:19 p.m.
EST (2019 GMT), up 1.9 percent from Monday's finish.
 Despite the day's rise, a key industry report from the
world's top platinum refiner Johnson Matthey JMAT.L said
prices for the metal used to make autocatalysts could fall to
$700 an ounce over the next six months if the economic crisis
continues.
 "We have uncertainties over the supply now," said PGM
trader Rory McWeigh at Commerzbank in Germany. "Even profitable
mining companies, like Lonmin, are not looking to develop
(mines) due to expenses and the decline in price," he said.
 Platinum spiked to a record $2,290 an ounce in March as a
power shortage in main producer South Africa disrupted mining.
But the price has tumbled since then as car sales deteriorated
and platinum also tracked declines in gold amid the banking
crisis and the global economic slowdown.
 The Johnson Matthey report said global demand for platinum
catalytic converters from automakers will climb 2 percent to
4.23 million ounces in 2008 on higher consumption in Europe and
emerging economies, despite a heavy decline in North America.
 More than 60 percent of platinum is used in autocatalysts
to clean exhaust fumes.
 "It is finding a floor around $800 an ounce," analyst
Walter de Wet at Standard Bank in Johannesburg said. "The
market has probably priced in all the weakness in demand," he
said.
 INFLATION STORY DEAD
 Gold ended lower as choppy stock markets prompted
liquidation across all asset classes, traders said.
 Spot gold XAU= was at 734.25, down 0.2 percent from
Monday's close $735.90 an ounce. Bullion has lost nearly 30
percent in value since hitting a record of $1,030.80 in March.
 U.S. gold futures for December delivery GCZ8 settled down
$9.30, or 1.3 percent, at $732.70 an ounce on the COMEX
division of the New York Mercantile Exchange.
 "The bullish story on gold based on fears of inflation is
dead," Jesper Dannesboe, senior commodity strategist at Societe
Generale, said.
 "Because now it is disinflation and even deflation. With
the oil prices going down the way they are it is very difficult
to hold onto long gold positions unless the dollar was to
collapse, which is not the case."
 A precious metals broker in New York said gold was stuck in
a broad range between $680 to $780.
 "We are just seeing a flight from all asset classes in
general, including the gold market," he said.
 Silver XAG= was at at $9.54, up 2.9 percent from Monday's
finish of $9.27 and palladium XPD= fetched $211.00, down 1.6
percent from its previous close of $214.50.
 (Reporting by Frank Tang; Editing by David Gregorio)





































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