(Recasts, updates with closing prices, market activity, adds
second byline, second dateline, previously LONDON)
By Frank Tang and Atul Prakash
NEW YORK/LONDON, Feb 20 (Reuters) - Gold rose to a record
high on Wednesday, reversing early losses as a sharp turnaround
in crude oil prices and a U.S. report on rising consumer prices
boosted bullion's appeal as a hedge against inflation.
Platinum slipped on profit taking, ending a record-setting
streak after 14 straight days of gains. But analysts said it
persistent supply problems should start platinum back on its
upward path after a pause.
"We are trading with the crude. Crude's above $100. We
acted very well this morning with the crude down, and now it
looks like we are finally catching up," said Jonathan Jossen,
an independent floor trader in New York.
Gold <XAU=> rose to $934.80/935.60 by New York's late quote
at 2:15 p.m. EST (1915 GMT) from $927.00/927.80 on Tuesday.
Bullion's gains accelerated in late afternoon trade,
reaching an all-time high of $943.20.
The gold contract for April delivery at the COMEX division
of the New York Mercantile Exchange <GCJ8> settled up $8.00 to
$937.80 an ounce.
"Having been through a period of consolidation, gold is now
extremely well placed to set a fresh record high as investors
continue to seek the metal's anti-inflationary and safe-haven
attributes," said James Moore, analyst at TheBullionDesk.com.
U.S. crude futures <CLc1> reversed initial losses to
settle up 73 cents at $100.74 a barrel. A government report
showed U.S. inflation accelerated in January, complicating the
Federal Reserve's efforts to bolster the flagging economy.
PLATINUM, PALLADIUM RETREAT
Platinum had fallen as much as 3 percent, after surging 43
percent in less than a month on worries the market deficit
would widen sharply this year following output losses in top
producer South Africa due to an electricity supply crisis.
Platinum <XPT=> fell as low as $2,065 per ounce and was
quoted at $2,120/2,130 at 4:00 p.m. EST, down from the New York
close of $2,140/2,150 on Tuesday, when it hit a record high of
$2,160.
Palladium rose to a 6-1/2-year high before falling.
"The platinum market is down on profit-taking. We have had
a strong price rise in a very short period of time, so if you
have a phase of consolidation coming through, that will not
surprise me," said Michael Widmer, metals analyst at Lehman
Brothers.
"But I still think that we are going to go higher. The
demand-supply deficit will continue to support the market."
Platinum surged this year after mines in South Africa,
which account for 80 percent of the world's supply, ground to a
halt for five days at the height of last month's power crisis.
The mines now get 90 percent of normal supply and analysts
said it would take years to normalize the situation.
The world's No. 1 platinum miner Anglo Platinum has said
power problems would cut output by 120,000 ounces in 2008,
while Impala Platinum, the world's No. 2 producer, forecast
"very tight market conditions."
Analysts said the global platinum deficit could widen to
500,000 to 600,000 ounces by the end of 2008, compared with
about 265,000 ounces in 2007. The market had a surplus of
65,000 ounces in 2006, following seven successive years of
deficits.
Platinum slipped in other markets also. The December 2008
contract <0#JPL:> on the Tokyo Commodity Exchange ended 175 yen
per gram lower at 6,965 an ounce. It briefly hit a new record
of 7,207 yen before tumbling to a low of 6,901 yen.
Analysts said the exchange's plan to raise margins
triggered profit-taking in Asia. It will raise the level by
50,000 yen per platinum contract for all new and existing
positions from Thursday until the end of the month to cope with
volatility.
Silver <XAG=> edged down to $17.81/17.86 an ounce from its
previous New York finish of $17.36/17.41, while palladium
<XPD=> rose up to $495 an ounce before falling to $481/484 an
ounce, versus $491.00/494.00 late in the U.S. market.
(Additional reporting by Lewa Pardomuan in Singapore and
Daniel Magnowski in London; Editing by David Gregorio)
