SINGAPORE: Platinum hit a three-month high on Tuesday, regaining its premium over gold for the first time since last March as supply concerns lifted prices, while gold struggled to break through a recent price range on the lack of a fresh catalyst.
News that Anglo American Platinum, the world's top platinum producer, would indefinitely close four of its shafts in South Africa's platinum belt and sell its Union mine sent platinum up 2.1 percent to a three-month high of $1,691 an ounce.
Platinum consequently regained its premium over gold, having gained favour with investors expecting higher prices for the metal, which is used mainly to produce jewellery and autocatalysts, against the backdrop of an improving global economy.
Spot gold was poised to test the upside limit of a recent range between $1,653 and $1,678, although the strength could be short-lived, as gold investors gauge the possibility of withdrawal of monetary stimulus by key central banks, such as the Federal Reserve.
Investors are also watching the bickering over raising the US debt limit in Washington. A failure to raise the limit would see the United States default as early as mid-February.
"The gold market may go through a repeat of what we saw in December, namely, varying 'mood swings' that will result in directionless trading," Ed Meir, an analyst at INTL FCStone, said in a research note.
"Silver will likely shadow gold quite closely, but palladium and platinum could decouple somewhat, as they seem to be more responsive to the fundamentals that, on balance, are quite supportive."
Spot gold rose half a percent to $1,674.28 an ounce by 0719 GMT.
US gold crawled up 0.3 percent to $1,674.40.
Technical analysis suggested that spot gold remained neutral in the range of $1,653 to $1,678 an ounce during the day, said Reuters market analyst Wang Tao.
The dollar wallowed near a 1-1/2-week low against a basket of currencies, after Fed Chairman Ben Bernanke's comments suggested the central bank was not in a hurry to withdraw monetary stimulus.
A weaker greenback supports dollar-denominated commodities by attracting buyers holding other currencies.
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