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UPDATE 6-Platinum surges on supply fears, gold eyes $1,000
(Updates with prices)
LONDON, March 4 (Reuters) - Platinum hit record highs on Tuesday as speculators bought on worries over supplies, while gold consolidated recent gains before making a stab at the key $1,000-an-ounce level.
Spot platinum XPT= hit a session high of $2,290 an ounce before falling to $2,269/2,276 by 1612 GMT, compared with $2,230/2,237 late in New York on Monday.
"Platinum is very strong, inventories are low, fundamentals are very supportive," said Suki Cooper, analyst at Barclays Capital. She added that the global deficit this year could be up to 600,000 ounces.
"Given the strength of investment demand this year, the platinum deficit could be greater than that."
Platinum, used in jewellery and auto catalysts to clean exhaust fumes, has risen nearly 50 percent this year as a power crisis which has disrupted mining in main producer South Africa sparked supply fears.
David Thurtell, metals analyst at BNP Paribas, said supply concerns and weaker dollar had been supporting the market. He said that price dips would attract buyers.
"Platinum has got limited downside. The weak longs have been cleaned out," he added.
Gold XAU= hit a bid high of $987.90 a troy ounce before slipping to $975.40/976.30, against $981.20/982.00 late on Monday, when it touched a record high of $989.30.
"$1,000 seems likely in the near term, with global inflation expectations being fuelled by the current commodity bull run," Standard Bank said in a note.
The precious metal has gained nearly 50 percent since the credit market crisis triggered buying from investors looking for a haven from financial market uncertainty.
Another significant reason behind gold purchases has been the falling U.S. currency against the world's major currencies which makes dollar-denominated metals cheaper for investors in other currencies.
The dollar was trading near record lows against the euro and analysts think further losses are likely if as is widely expected the U.S. Federal Reserve cuts rates aggressively at its March 18 meeting.
"We believe $1,000 is on the cards. The dollar is weak, the Fed is easing and inflation fears are very supportive," Cooper said. "The environment is positive."
Investors also use gold as a hedge against inflation, which is often triggered by rising commodity prices, specifically oil CLc1 which on Monday hit a record high of $103.95 a barrel on growing fears that OPEC will not increase supplies.
Spot palladium XPD= rose as high as $590 an ounce, its highest in more than six years and was last at $583/587, up from $576/580 on Monday.
"We have heard commentators talk about switching from platinum to palladium in industrial applications, which we believe to be erroneous, at least for the next few years," UBS said in a recent note.
"While jewellery demand for palladium may improve, there is no physical scarcity of palladium and very little chance that we will run out of the metal."
Silver XAG= was at $20.13/20.18 an ounce after rising to a high of $20.55, versus $20.27/20.32 In New York. It reached a 27-year peak of $20.60 an ounce on Monday.
(Additional reporting by Atul Prakash in London)
(Reporting by Pratima Desai; editing by Peter Blackburn)
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