* 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, the world's third-biggest platinum producer, closing some high-cost mines and cutting costs to survive a market downturn. [ID:nLI461697]
Spot platinumwas 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 Mattheysaid 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 goldwas 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 deliverysettled 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.
Silverwas at at $9.54, up 2.9 percent from Monday's finish of $9.27 and palladium 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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