* Platinum rises on South African strike, Lonmin bid
* Gold ticks up on bargain hunting after three-day fall
(Recasts, adds comment, updates prices)
By Jan Harvey
LONDON, Aug 6 (Reuters) - Platinum rose 4 percent and
palladium more than 7 percent as strike action in South Africa
fuelled supply fears, with Xstrata's $10 billion bid for Lonmin
also boosting confidence in the market.
The rise breaks a sharp fall in platinum prices, which
tumbled more than 10 percent in the last three days on fears
over falling demand for the metal from carmakers.
Spot platinum <XPT=> hit a high of $1,629.00 ounce before
easing to trade at $1,613.50/1,633.50 at 1437 GMT against
$1,563.00/1,583.00 late in New York on Tuesday.
Its sister metal palladium <XPD=> rose to a session high of
$371.00 an ounce, before slipping back to $357.00/365.00 against
$346.00/354.00 in New York.
"It is only a one-day strike, but it has probably reminded
people that supply is very concentrated on South Africa," said
VM Group analyst Matthew Turner. "Any problems there will
immediately affect the market."
The platinum-to-gold ratio dropped to 1.7 on Tuesday, a
level it has not breached in the last three years, Turner added.
"Maybe traders thought platinum looked cheap relative to
gold," he said.
South Africa, source of four out of five ounces of the
world's platinum, was hit by strike action on Wednesday which
shut mines and factories. []
Anglo Platinum <AMSJ.J>, the world's top producer of the
precious metal, said some of its mines, including its biggest,
Rustenburg, and a smelter had been affected by the strike.
[]
Gold producers Harmony <HARJ.J>, Anglogold Ashanti <ANGJ.J>
and Gold Fields <GFIJ.J> all said their production had been hit.
Platinum prices were also helped by Anglo-Swiss miner
Xstrata's <XTA.L> $10 billion bid for the world's third biggest
platinum producer, Lonmin <LMI.L>. []
"Platinum has been buoyed by interest in the sector (linked
to) Xstrata's bid for Lonmin," Commerzbank trader Rory McVeigh
told Reuters. "It shows a more positive view of the platinum
situation in South Africa."
GOLD TICKS UP
Gold rose 1 percent in Europe on Wednesday as investors took
advantage of a three-day fall in prices to buy below the key
$900 an ounce support level.
The market was cheered by the Federal Reserve's intimation,
after it left interest rates on hold at 2 percent late Tuesday,
that it is in no hurry to hike rates. []
"The tone of the statement is consistent with our
economists' view that the Fed is likely to keep rates unchanged
in the next several meetings," said Barclays Capital in a note.
"(This) is a positive for gold prices in the coming months."
The precious metal slipped more than $20 an ounce on Tuesday
as part of a broader sell-off of commodities, led by crude oil.
There are signs that investment demand may be softening.
The largest gold-backed exchange traded fund, New York's
SPDR Gold Trust <GLD>, said its gold holdings fell 15 tonnes or
2.3 percent on Tuesday to a one-month low of 659.31 tonnes.
Gold <XAU=> rose to $878.80/879.80 an ounce from
$876.35/877.95 late in New York on Tuesday, while silver <XAG=>
climbed to $16.56/16.61 an ounce from $16.45/16.53 late in New
York.
COMEX December gold <GCZ8> rose 50 cents to $886.60 an ounce
in New York.
(Reporting by Jan Harvey; Editing by Michael Roddy)
