Platinum hits 2-week high, gold steadies on dollar

Enlarge Photo Gold earrings are seen on display at a jewellery shop in Singapore in this March...

Fri, May 9 10:13 AM

By Lewa Pardomuan

SINGAPORE (Reuters) - Platinum jumped to its best level in two weeks on Friday on speculative buying ahead of the launch of new platinum exchange-traded notes, while gold held near a one-week high on a surging euro.

The two ETNs -- UBS E-Tracs Long Platinum ETN and UBS E-Tracs Short Platinum ETN -- will start trading soon on the NYSE Arca platform, according to CNBC television and NYSE Euronext exchange data.

Dealers also reported platinum purchases in Japan, Europe and the United States 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.

Spot platinum rose as high as $2,034 an ounce, its highest since April 23, up from $2,008.50/2,028.50 late in New York on Thursday.

"Automobile makers start to buy, therefore the price will increase rapidly. By the end of May, the price may be $2,100," said Yukuji Sonoda, precious metals analyst at Daiichi Commodities in Tokyo.

But jewellery makers weren't buying because of the high prices, using recycled metal instead to meet demand, said Sonoda.

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

The benchmark platinum contract for April 2009 delivery on the Tokyo Commodity Exchange rose 150 yen per gram higher at 6,553 yen.

Gold hit a high of $884.20 an ounce, not far from Thursday's one-week high of high at $885.25 an ounce, before dipping to $880.40/881.40 an ounce, down from $881.40/882.60 an ounce late in New York.

"The euro has reversed after finding some support around the 1.5821 region. That provides some support for gold," said Adrian Koh, an analyst at Phillip Futures in Singapore.

"Higher oil prices and the platinum news are also supportive. So basically, it's a string of good news for gold."

The euro edged up to $1.5417 on Friday after rebounding from a two-month low on reduced expectations for European Central Bank rate cuts.

In the physical market, steady purchases from jewellers in Indonesia, Thailand and Vietnam pushed up premiums for gold bars to 80 U.S. cents an ounce to the spot London prices in Singapore, from 75 cents last week.

India, the world's largest gold consumer, was active an buyer earlier this week ahead of Akshaya Tritiya, a festival when many Hindus buy gold with the belief it will give them lasting prosperity.

Gold futures for June delivery on the COMEX division of the New York Mercantile Exchange shed $0.6 an ounce to $881.5 an ounce.

Silver edged down to $16.83/16.89 an ounce from $16.85/16.91 an ounce. Spot palladium rose to $434/439 an ounce from $430.50/438.50 an ounce.

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