* Palladium soars on improved auto view, U.S. ETF demand
* Platinum highest since August 2008 on supply concern
* Better risk appetite, Wall St gains boost gold
* Coming Up: FOMC March meeting minutes on Wednesday
(Recasts; adds comments, updates prices to market close)
By Frank Tang
NEW YORK, April 5 (Reuters) - Palladium rose to a two-year
high above $500 an ounce on Monday, and sister-metal platinum
reached its priciest since August 2008 backed by strong
investment demand due to an improving auto-sector outlook.
A softer dollar also bolstered equities crude oil and gold,
which rose to a near one-month high.
Inflows into the U.S. platinum and palladium exchange
traded funds and optimism about the global economic recovery
have spurred buying of the underlying platinum group metals,
which are used in the auto industry for catalytic converters
and also in jewelry.
Platinum was underpinned by worries about rising cash
production costs, production interruptions, and a lack of
adequate power supply in South Africa, the world's largest
producer of the metal.
"The global auto recovery, the impact of the softer U.S.
dollar, and potential supply concerns out of South Africa are
driving platinum group metal prices," said William Rhind,
strategic director of ETF Securities Ltd' U.S. unit.
Spot palladium <XPD=> rose to $500.50 an ounce, its
strongest price since March 2008. In late New York trade it was
at $500 an ounce, up from $490 late the previous session on
Thursday.
New York June palladium futures <PAM0> settled up $16.65 at
$508.00 an ounce on Monday.
Palladium and platinum prices began to rally in January
after London-based ETF Securities launched the first U.S.
platinum <PPLT> and palladium <PALL> funds, which now hold
about 900,000 ounces of the combined metals.
"There is strong investment demand in the U.S. because of
the platinum and palladium ETFs, and the recovery in the auto
sector, particularly in the very strong developing markets,
such as China, has led to a pick-up in demand," said Carlos
Sanchez, precious metals analyst at commodities consultant CPM
Group.
U.S. auto sales jumped to a seven-month high in March, led
by a 41 percent surge at Toyota Motor Corp <7203.T> after the
Japanese automaker offered the steepest discounts in its
history to win back sales lost during its recent safety crisis.
[]
PLATINUM-GOLD LINK WEAKENS
Gains on Wall Street after optimistic economic data,
including pending home sales and U.S. services sector data in
March, fueled investment sentiment in the gold market.
[]
Spot gold <XAU=> was at $1,131.40 an ounce, compared with
$1,125.50 quoted late in New York on Thursday. Its session high
$1,133.20 was the loftiest since March 8.
U.S. June gold futures <GCM0> settled up $7.70 at $1,133.80
an ounce.
The New York market, which was closed on Friday, reopened
on Monday after the Easter weekend, while the U.K. and most
European markets were shut on Monday for a holiday break.
Platinum started to diverge from gold in January, after
showing a strong correlation with gold prices in the last
quarter of 2009.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Graphic of the gold-platinum correlation:
http://link.reuters.com/nak56j
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
Platinum <XPT=> was at $1,700 an ounce, compared with
$1,668.50 late in New York on Thursday. Earlier in the session,
it hit $1,703.50, the loftiest since August 2008.
Silver <XAG=> firmed to $18.07 an ounce, up from $17.87
Thursday. It hit a 2-1/2 month high of $18.11 on Monday.
Close Change Pct 2009 YTD
Chg Close % Chg
US gold <GCM0> 1133.80 7.7 0.7 1096.20 3.4
US silver <SIK0> 18.118 0.228 1.3 16.845 7.6
US platinum <PLN0> 1709.80 34.20 2.0 1471.00 16.2
US palladium <PAM0> 508.00 16.65 3.4 408.85 24.3
Prices at 3:01 p.m. EDT (1901 GMT)
Gold <XAU=> 1130.90 6.40 0.6 1096.35 3.2
Silver <XAG=> 18.06 0.20 1.1 16.84 7.2
Platinum <XPT=> 1700.00 31.50 1.9 1465.50 16.0
Palladium <XPD=> 500.50 10.500 2.1 405.50 23.4
(Additional reporting by Lewa Pardomuan in Singapore; Editing
by Alden Bentley)
