Platinum hit a four-month high on Monday, extending its outperformance to gold after roaring US car sales boosted demand for the key ingredient used in purifying automotive emissions.
The spot price of platinum jumped 0.8 percent on the day, reaching above $1,705 an ounce. It has risen more than 10 percent year to date, matching gains from all of 2012.
Platinum's latest rally came after a surge of more than 14 percent year-on-year in US car sales in January.
A soft earnings report issued by No. 1 platinum miner Amplats also heightened worries of an impending drop in the metal's production.
Palladium, platinum's sister metal and often referred to as the other part of the Platinum Group Metals, rose slightly from the previous session, but enough for the spot price to hit its highest in 17 months, just shy of $760 an ounce. Palladium is up nearly 8 percent on the year, edging last year's 7 percent gain.
Spot gold rose 0.4 percent on the day, hovering just below $1,674 an ounce. For the year, gold is flat after a 7 percent rise through 2012 that made it a 12th straight year of gains for the shiny metal.
Spot silver fell 0.3 percent to $31.70 an ounce.
Analysts said PGMs could run higher in coming weeks if US data through February pointed to further economic recovery, although gold could also catch up with a technical rebound.
“Gold is sitting below a very important key resistance of $1,700 and once it gets past that, it could spring with force,” said Adam Sarhan at Sarhan Capital in New York. “Imagine a coil that's been wound down, then let go. That's gold.”
PGMs posted strong gains after US automakers reported a 14.2 percent sales increase in January from a year earlier, with a seasonally adjusted annualised rate of sales reaching 15.29 million vehicles.
The metals are widely used in auto catalysts to clean up exhaust emissions.
Momentum picked up when major producer Amplats revealed a significant full-year loss on Monday. The company cut its output target to between 2.1 million and 2.3 million ounces a year and slashed capital expenditure by 11 billion rand ($1.2 billion). It plans to cut capex 25 percent over the next decade to 100 billion rand.
A dip in stock markets and the euro removed some support for gold. Data released on Friday showed US hedge funds and money managers slashed gold's net length in futures and options last week on signs of a steadily improving US economy.
The data from the Commodity Futures Trading Commission for the week to January 29 showed a 2.89 million ounces decrease in net long speculative positions in gold to 16.7 million ounces from the previous week.
Speculators boosted both platinum and palladium's net length, which were essentially bullish bets, to record highs, the CFTC data showed.
“Futures and options investors are on the retreat, pulling money from the gold market and putting it in more cyclical markets (such as platinum and palladium) which benefit from the stabilisation of growth,” said Tobias Merath, global head of commodity research at Credit Suisse.
Gold investors were reassessing their positions after last week's mixed US economic data failed to provide a clear direction for the market.
US payrolls numbers on Friday surprised on the downside, triggering a $10 jump in the metal on safe haven buying.
But these were offset by strong consumer confidence and ISM manufacturing numbers, and comments from a Federal Reserve official suggesting that monetary easing could be scaled back later this year.
“Gold is without structural support at the moment, but given speculative positioning remains relatively light, weaker-than-expected macro data could quickly spur prices higher amid global balance sheet expansion,” Barclays Capital said in a note. - Reuters