* Platinum jumps 3 pct, palladium 9 pct on ETFS news
* Gold up 1 pct on weak dollar amid thin liquidity
(Releads with PGM rally and updates market activity to
close of U.S. session; previous dateline LONDON)
By Barani Krishnan
NEW YORK, Dec 24 (Reuters) - Platinum and palladium prices
surged Thursday after a U.K. firm came a step closer to
launching the first U.S. exchange-traded funds on the precious
metals used for purifying auto emissions.
The U.S. Securities and Exchange Commission approved a
proposed rule change on Tuesday to list and trade shares of the
Platinum and Palladium Trusts proposed by London-based ETF
Securities, the SEC's website said on Thursday.
[]
Analysts anticipated a rush of investment dollars into the
market for PGM, or platinum metals group, if ETFS is given the
final nod to list.
Tuesday's SEC approval is to be followed by compliance checks by NYSE Arca, a trading platform owned by NYSE Euronext
<NYX.N> where the funds are to list.
"The ETF story is interesting because ... it doesn't take a
lot of money to make platinum and palladium move up," said
George Gero, vice president with RBC Capital Markets Global
Futures in New York.
"This comes at a time when the automobile industry is
making noises about recovery," Gero said.
According to industry data, more than half of the world's
platinum supply is used in making the catalytic converters that
clean the emissions released by motor vehicles.
Spot platinum <XPT=> hit a one-week high above $1,466 an
ounce by 2:15 p.m. EST (1915 GMT), up from the $1,418.50 level
seen late Wednesday.
The January platinum contract <PLF0> on the COMEX metals
division of the New York Mercantile Exchange settled up $41.10,
or almost 3 percent, at $1,467.90 an ounce.
Spot palladium <XPD=> hit three-week peaks at $386 an
ounce, up from late Wednesday's $355.50 level.
COMEX palladium for March <PAH0> finished up $32.30, or 9
percent, at $389.65 an ounce.
Gold prices rose more than 1 percent as the dollar fell.
Analysts said moves in gold were partly exaggerated due to
low liquidity caused by the Christmas holiday period.
But the supply-demand factors that sent gold to all-time
highs of nearly of $1,230 an ounce in early December were still
intact, some said.
"Gold's rising because of a weaker dollar," said Daniel
Smith, analyst at Standard Chartered. "But also the recent
sell-off was a bit overdone as a lot of the factors that
supported gold are still in place."
The dollar fell after weak U.S. housing data the previous
day dampened optimism about the outlook for the U.S. economy.
A weaker dollar makes gold cheaper for non-U.S. investors and
boosts its appeal as an alternative asset. []
Spot gold <XAU=>, which reflects trading in bullion, stood
at $1,104.45 an ounce, against the $1,087 level seen in New
York late on Wednesday.
Bullion had tumbled to a seven-week low of $1,074.10
earlier this week, but at current levels, was set to post its
biggest one-day percentage gain in more than three weeks.
COMEX gold for February <GCG0> finished up $10.80 at
$1,104.80 an ounce.
Among other precious metals, spot silver <XAG=> was bid at
$17.43 an ounce against Wednesday's $17.09.
COMEX silver for March <SIH0> ended up 25 cents, or 1.5
percent, at $17.44 an ounce.
(Additional reporting by Humeyra Pamuk and Chikako Mogi;
Editing by Lisa Shumaker)
