UPDATE 2-Gold, platinum near record on S.Africa supply woes

(Adds closing in Tokyo)

By Lewa Pardomuan

SINGAPORE, Jan 28 (Reuters) - Gold and platinum held near
their historic highs on Monday on lingering fears over supply
after South African mining companies suspended operations due
to a power crisis which has become a national emergency.

Silver was within sight of a 27-year high and palladium
hovered around its best level in 20 months hit last week, but
gold's rally hit jewellery makers in Asia.

Spot gold XAU= rose to $916.00/916.80 an ounce from
$913.00/914.00 late in New York. Gold rallied to record high of
$923.40 an ounce on Friday, with dealers expecting the metal to
crack the upside target of $950 in coming weeks.

"The momentum is still quite strong. It may repeat a new
high around $925," said William Kwan, a dealer at Phillip
Futures in Singapore, adding that expectations of more rate
cuts in the United States also underpinned sentiment.

Platinum XPT= hit an intraday high of $1,687 an ounce
before slipping to $1,666.50/1,671.50, down from
$1,671.50/1,676.50 an ounce in New York. It spiked to an
all-time high of $1,697 an ounce on Friday.

South African mining companies hope to resume production
later this week after being allowed to carry out underground
maintenance work in mines across the country that have been
crippled by a power crisis. [ID:nL28488624]

"Platinum is in fact in a much better shape when it comes
to the demand and supply environment. The number of cars is
increasing. In countries like China, people are buying more
cars. I can just talk about $1,800 within six months," said
Kwan of Phillip Futures.

Platinum is used in jewellery and auto catalysts.

Kwan pegged the downside for gold at $888.

The physical market came to a standstill on Monday, with
record-high gold prices turning away jewellers.

"Most jewellers don't think the price is real. They are
facing a dilemma. Because they hedge, they have to pay margin
calls if the price goes up," said a dealer in Singapore.

"If the price goes down, they also suffer. They are not
happy. This is what I gather from the wholesaler side. Gold
jewellers even think whether they should liquidate their assets
and keep cash instead."

The euro was steady at $1.4671 EUR= as investors remained
cautious on the U.S. currency before a Federal Reserve meeting
this week, when the central bank is expected to slash interest
rates again following last week's emergency cut.

The Fed is expected to cut rates again by as much as a
half-point to 3.0 percent after its two-day meeting ending
Wednesday, although some investors were starting to doubt the
central bank would act so aggressively after last week's move.

The most active platinum futures <0#JPL:> on Tokyo Commdity
Exchange, currently December 2008, hit a record high of 5,482
yen per gram before ending 85 yen higher at 5,435 yen.

"The TOCOM market was on the rise, led by gains in the
nearby months, as other Asian players started joining in to
arbitrage," said Kaname Gokon, deputy general manager at Okato
Shoji Co's research section.

Gokon said local investors who tend to trade distant months
due to higher liquidity than that of nearby months should watch
out for the firming February contract.

COMEX gold futures also sustained gains, with the most
active February contract GCG8 rising $6.9 an ounce to $917.6.
It rallied to record high of $924.30 an ounce on Friday.

Silver XAG= edged down to $16.40/16.45 an ounce from
$16.43/16.48 -- not far from Friday's 27-year high of $16.61 an
ounce.

Palladium XPD= dipped to $377/382 an ounce from
$378.50/383.50 an ounce.
Precious metals prices at 0841 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 917.40 4.40 +0.48 10.17
Spot Silver 16.41 -0.03 -0.18 11.10
Spot Platinum 1667.50 -4.00 -0.24 9.70
Spot Palladium 377.00 -1.00 -0.26 2.45
TOCOM Gold 3160.00 -26.00 -0.82 3.27
108844
TOCOM Platinum 5435.00 85.00 +1.59 1.80
53907
TOCOM Silver 566.40 -6.70 -1.17 4.70
1326
TOCOM Palladium 1315.00 5.00 +0.38 -2.66
1072
Euro/Dollar 1.4695
Dollar/Yen 106.46
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Additional reporting by Risa Maeda in Tokyo; Editing by Ben
Tan)