* Platinum hits three-month high, regains premium over gold
* Amplats set to cut platinum output by 400,000/oz
* Palladium reaches highest since March 2012
By Jan Harvey and Clara Denina
LONDON, Jan 15 (Reuters) - Platinum hit a three-month high
on Tuesday, extending recent gains, after top global producer
Anglo American Platinum said it would mothball two
South African mines and sell another, cutting output by around
400,000 ounces annually.
The surge in platinum also propelled prices above that of
gold for the first time in almost a year.
Spot platinum was 1.5 percent higher at $1,680 an
ounce at 1603 GMT, having earlier touched $1,699.50, its
strongest since October 9. The metal is up almost 10 percent on
the year to date.
Platinum miners have been under intense pressure, hit by a
wave of strike action in the last year while contending with
rising operating costs and stubbornly depressed prices.
"Anglo Platinum will not be the last company to cut output,"
S.P. Angel analyst John Meyer said. "We would expect platinum
miners to pull back by 25 to 30 percent, which is going to have
a severe impact on prices."
Anticipation of Amplats' long-awaited review had already
pushed platinum higher on Monday. The move, which will involve
cutting 14,000 jobs to restore profits, may provoke a repeat of
last year's strikes.
Platinum was trading at a premium to gold for the first time
since March, after it traded at a historically unusual discount
to the yellow metal for much of last year.
"We think there has been some stop-buying on the
platinum/gold ratio," a trader at broker Triland said. "It is
quite a big rally but the market is still coming down to the
bottom of 2011's big range of $1,700 to $1,900 an ounce. $1,705
is the resistance number that we have at the moment."
Analysts said platinum demand was still depressed in Europe.
"There has been a 6 percent reduction in European auto
production in 2012 and we expect a further 5 percent contraction
this year," Citigroup metals strategist David Wilson said.
"You can take out 300,000 ounces of mine production, which
tightens the market and puts into deficit, but then you also
have got pretty high above ground stocks that can meet any
shortfall. I think that there is not much scope for further
growth and the platinum price can't push too much past $1,700."
GOLD, SILVER HOLD FIRM
Platinum's rise pulled other precious metals up, with
palladium hitting its highest since last March at
$717.50. It was last at $707.37, up 0.9 percent on the day.
Gold prices also found support from a looming battle in
Washington over the government's borrowing limit. Federal
Reserve Chairman Ben Bernanke spoke on the economic effects of
any failure to agree to a higher ceiling.
Spot gold was up 0.9 percent at $1,681.90 an ounce,
while silver stood at $31.27, up 0.8 percent. U.S. gold futures
for February delivery rose 0.7 percent to $1,682.90.
"The debt ceiling debate should also offer some support as
it once again raises the risk that U.S. growth could be hurt,"
Saxo Bank analyst Ole Hansen said.
"Gold is all about re-building confidence and the last few
days have done just that. But we're not out of the woods yet,
not before we see a break above 1,710."
Gold buyers in major consumer India held off making fresh
purchases on Tuesday as prices rose, but strong physical buying
from China is expected to continue in the next few weeks ahead
of the Lunar New Year festivities.
South Africa's gold output fell by 32.2 percent by volume in
November, highlighting the impact of illegal strikes, while
platinum group metals production rose 3 percent compared with
the same month in 2011, data showed on Tuesday.
On the wider financial markets, the dollar held steady
against a basket of currencies, paring losses made earlier after
Federal Reserve chief Ben Bernanke said the recovery was still
fragile and warned the economy was at risk from political
gridlock over the deficit.