LONDON: Platinum gained more than 1.5 percent on Tuesday, lifted by bargain-hunting and after a major producer announced mine closures while gold prices were range-bound. A key industry report from the world’s top platinum refiner Johnson Matthey said prices could fall to $700 an ounce over the next six months if the economic crisis continues and investors keep shunning the metal used to make auto catalysts. There was little market reaction to the report, but investors focused instead on news of Lonmin, the world’s third-biggest platinum producer, closing some high-cost mines and cutting costs to survive a market downturn. Spot platinum was at $817.50/837.50 an ounce by 1522 GMT, after hitting a session high of $821.50 an ounce and compared to $808 an ounce in New York late on Monday. Platinum spiked to a record $2,290 an ounce in March mainly due to a power shortage in main producer South Africa that disrupted mining. But the price has since fallen sharply, tracking declines in gold, hit by the banking crisis, the global economic slowdown and deteriorating car sales. More than 60 percent of platinum is used in auto catalysts to clean exhaust fumes. Inflation story dead: Gold was steady, taking its cue from the currency markets, where the euro was mainly flat against the dollar at $1.2652. Spot gold was trading at $739.20 an ounce, higher from $735.90 an ounce in New York late on Monday. Bullion has lost nearly 30 percent in value since hitting a record of $1,030.80 in March. New York gold futures fell $3.4 an ounce to $738.7. Silver was at $9.42/9.50 an ounce versus $9.27 and palladium at $209.50/217.50 an ounce from $214.50. reuters

Source