* Gold up 1.4 percent, silver up 3.6 percent for Q1
* Palladium 17 percent higher, platinum up 12 percent
* Lonmin outage pushes platinum to near 20-month high
* Palladium touches 2-year high on fund buying
* Coming up: U.S. March nonfarm payrolls on Friday
(Recasts, updates prices, market activity to close; new
byline, dateline, previously LONDON)
By Frank Tang
NEW YORK, March 31 (Reuters) - Gold rose toward $1,120 an
ounce on Wednesday as the dollar declined against the euro, and
platinum group metals also gained nearly 2 percent due to
supply fears and strong physical demand.
Gold ended the first quarter up 1.4 percent.
Palladium rallied to a two-year high, and platinum climbed
to just below a 20-month high after the world's No. 3 platinum
producer Lonmin <LMI.L> said its largest furnace was shut with
repairs expected to take over a month.
Sharp inflows into the first U.S. platinum and palladium
exchange-traded funds (ETFs) and optimism about the auto
industry's recovery have spurred buying of platinum group
metals.
"There have been positive trends in industrial and jewelry
demand, particularly from China, and we expect to see more
investment demand driven by the ETFs," said Thomas Winmill,
portfolio manager of Midas Fund <MIDSX.O>.
Winmill said flat output of platinum group metals combined
with a recovering global auto industry led by China should
boost platinum and palladium prices.
More than half of the world's output of platinum group
metals is used as catalytic converter to clean exhaust fumes
from vehicles.
For the first quarter, palladium and platinum ended the
first quarter 17 percent and 12 percent higher respectively,
surpassing the single-digit gains posted by gold and silver.
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For a graphic on first quarter price performances, click:
http://graphics.thomsonreuters.com/310/CMD_Q1PRF0310.gif
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Palladium <XPD=> hit a high of $483.50 an ounce, its
loftiest since March 2008. It was last at $475 an ounce, up
from $466.5 late in New York on Tuesday.
Platinum <XPT=> jumped to $1,648.50 an ounce, just below a
20-month high of $1,654 reached on Jan. 20. It was last at
$1,639.50 an ounce, up from $1,616.50.
"Investors have come back in, they've just got the bug.
Overall, there's been some physical buying of platinum and
palladium," said Commerzbank trader Rory McVeigh.
Palladium and platinum prices began to rally after ETF
Securites Ltd. launched the first U.S. PGM exchange traded
funds in early January, which now have about 900,000 ounces of
the combined metals.
Platinum was also underpinned by worries about supplies
from South Africa, the world's largest producer of the metal.
GOLD UP LESS THAN 2 PCT FOR Q1
Spot gold <XAU=> was at $1,112.45 an ounce at 3:42 p.m. EDT
(1942 GMT), up from $1,102.50 an ounce late in New York on
Tuesday.
U.S. June gold futures <GCM0> ended up $8.80 at $1,114.50
an ounce.
The dollar fell against the euro [] after ADP Employer
Services said its data showed U.S. private employers
unexpectedly shed jobs in March. The report stoked concern
about the economy two days before the closely followed
government payrolls report. []
"The ADP report came in weaker than expected, pushing the
dollar down and gold higher. Fundamentals are bullish for gold,
there's inflation concerns, Asian central bank buying, huge
debt in the OECD," said Societe Generale analyst Jesper
Dannesboe.
While heading for its sixth consecutive quarter of gains,
gold was still about 10 percent below a record high around
$1,226 struck in December. Also, the first quarter's rise was
the smallest in the last three quarters.
Silver <XAG=> was last at $17.44 from $17.25. It was 3.6
percent higher for the quarter.
Close Change Pct 2009 YTD
Chg Close % Chg
US gold <GCM0> 1114.50 8.8 0.8 1096.20 1.7
US silver <SIK0> 17.526 0.196 1.1 16.845 4.0
US platinum <PLN0> 1646.90 20.80 1.3 1471.00 12.0
US palladium <PAM0> 479.95 9.60 2.0 408.85 17.4
Prices at 3:57 p.m. EDT (1957 GMT)
Gold <XAU=> 1112.85 10.35 0.9 1096.35 1.5
Silver <XAG=> 17.45 0.20 1.2 16.84 3.6
Platinum <XPT=> 1642.00 25.50 1.6 1465.50 12.0
Palladium <XPD=> 476.00 9.500 2.0 405.50 17.4
Gold Fix <XAUFIX=> 1115.50 6.00 0.5 1104 1.0
Silver Fix <XAGFIX=> 17.50 9.00 0.5 16.99 3.0
Platinum Fix <XPTFIX=> 1645.00 4.00 0.2 1466 12.2
Palladium Fix<XPDFIX=> 479.00 0.00 0.0 402 19.2
(Additional reporting by Pratima Desai and Maytaal Angel in
London; Editing by David Gregorio)
