* Spot palladium hits 18-mth high, platinum at 17-mth peak
* Gold's gains seen limited as euro remains under pressure
* Holdings by SPDR Gold Trust <GLD> fall 0.914 tonnes
(Updates prices, adds comments)
By Humeyra Pamuk
LONDON, Jan 18 (Reuters) - Platinum and palladium prices
rallied to their highest in over 17 months on Monday, helped by
investment demand after the launch of U.S.-based exchange-traded
funds this month.
Analysts expect platinum and palladium, used in catalytic
converters, to rise further, after gaining 14 percent and 28
percent respectively since late December, but also warn of a
correction, as concerns over the ailing auto sector persist.
The rise of platinum group metals (PGM) and the dollar's dip
against a basket of currencies lifted gold, but analysts said
fresh impetus was needed to push bullion higher as there was
little support from currency markets with the euro under
pressure. []
Spot platinum <XPT=> rose as high as $1,626.00 per ounce,
its highest since August 2008, and was at $1,618.50 an ounce by
1451 GMT, versus $1,596.50 an ounce late in New York on Friday.
Spot palladium <XPD=> rose as high as $457.50 an ounce, its
highest since early July 2008, and was $455 from Friday's
$452.50 an ounce.
"We saw the opening of the U.S. ETFs this month, that's
proved relatively popular so far. We've seen a little bit of
switching from gold to PGMs overall, so that's driven the
price," said Commerzbank trader Rory McVeigh.
"Alongside that, some concerns over liquidity with the ETFs
may put pressure on the liquidity brought borrowing into the
market as well and that in turn has leveraged up the price."
A U.S. subsidiary of London's ETF Securities launched the
products last Friday, and uptake has been healthy. About 170,000
ounces of metals were added to the products in the first two
trading sessions. []
But McVeigh said the lack of a solid recovery in the car
industry could mean once the investment demand is saturated,
both metals could be heading for a sharp correction.
"When it's investment driven, the exit could be a lot
harsher than the rise," he said, but he did not rule out a rise
to $1,800 an ounce for platinum in the short term.
FRESH IMPETUS NEEDED
Gold prices were up slightly but rises were limited as the
euro remained under pressure due to Greece's financial problems
and concerns over their potential impact on the single currency.
Investors have also kept to the sidelines because New York
markets were closed on Monday for Martin Luther King Jr. Day.
Spot gold <XAU=> inched up to $1,134.50 per ounce compared
with $1,129.90 an ounce late in New York on Friday. U.S. gold
futures for February delivery <GCG0> were at $1,134.80 per
ounce, up 0.4 percent.
"Until we get fresh momentum based on an event or data, gold
is going to continue to struggle as long as the dollar is being
preferred versus the euro," said Tom Kendall, precious metals
strategist at Mitsubishi.
Spot gold hit a five-week high of $1,161.50 on Jan. 11. Gold
has fallen 2.3 percent since then, as a rise in the greenback
hurt investor sentiment.
The high gold price has hurt Italian jewellers, who are now
turning to alternative materials such as leather, textiles and
ceramics to offset prices, an industry executive at the Vicenza
trade fair said. []
For stories from the Vicenza fair, click on []
Holdings by the world's largest gold-backed exchange-traded
fund, SPDR Gold Trust <GLD>, fell 0.914 tonnes to 1,112.836
tonnes on Jan 15. []
For a graphic on the SPDR holdings, click:
http://link.reuters.com/teh24h
Silver <XAG=> prices were at $18.62 an ounce versus $18.36
an ounce late in New York on Friday.
(Additional reporting by Risa Maeda in Tokyo, Editing by Sue
Thomas)
