(Adds quotes, updates prices)
By Atul Prakash and Veronica Brown
LONDON, Jan 31 (Reuters) - Gold was steady on Thursday as
the market digested gains made after the U.S. Federal Reserve
cut interest rates, while platinum hit a record high as
investors bet on further supply problems in South Africa.
Spot gold <XAU=> stood at $921.30/922.20 an ounce by 1610
GMT from $921.10/921.80 late in New York on Wednesday, when it
rallied to $932.00 -- just below Tuesday's all-time high of
$933.10 -- after the U.S. Federal Reserve cut interest rates.
Dealers said short-term momentum in gold had faded slightly
after the U.S. central bank lowered borrowing costs to 3 percent
-- as expected, with most of the outcome already factored into
prices.
Although prices were looking heavy at current levels --
raising the prospect of a corrective sell-off -- dealers said
the market's overall uptrend remained intact.
"The move down is nothing more than ebb and flow as the
market has had its reaction to yesterday's rate cut," said Peter
Hillyard, head of metals sales at ANZ Investment Bank.
"The trend is still up and moving towards $1,000 sooner
rather than later -- I would say within two months rather than
six," he added.
Currency fundamentals also turned against bullion prices as
the dollar rose versus the euro <EUR=>, making the precious
metal less attractive for non-U.S. investors.
PLATINUM SQUEEZED TO RECORD
Platinum <XPT=> raced to a record $1,741 per ounce as
investors reckoned the worst was far from over in top producer
South Africa's power crisis.
Dealers reported borrowing and buying of the metal, used in
jewellery and auto production, as South African state utility
Eskom said it had asked the country's mining sector not to ramp
up power use to the 90 percent level agreed earlier
[].
"The South Africa power problem has a long way to go and
that will force prices higher from here," a UK-based trader
said.
Spot platinum was last at $1,730/1,735 from $1,684/1,688 an
ounce in New York.
Some analysts have said they would not be surprised if
platinum prices eventually moved up through the $2,000 mark.
"Given the likelihood for further disruptions in the coming
weeks and months the metal is likely to see limited downside
movements, with dips viewed as buying opportunities by both
industrial users and investors," analyst James Moore of
TheBullionDesk.com said in a note to clients.
In other bullion markets, U.S. April gold futures <GCJ8>
firmed $1.90 to $922.50 an ounce, but were off Wednesday's
record high of $942.20.
The benchmark gold futures contract <0#JAU:> on the Tokyo
Commodity Exchange ended 13 yen per gram higher at 3,195 yen.
Silver <XAG=> fell to $16.78/16.83 an ounce from
$16.82/16.87, while palladium <XPD=> was steady at $386.00/389
in the U.S. market on Wednesday.
(Editing by Chris Johnson)
