Platinum stretched its gains into a third session as supply worries lingered after violence at a major mine in South Africa, the world's top platinum producing country, while gold was steady amid continued uncertainty over monetary policy.
The violence at the Marikana mine of Lonmin, the world's No.3 platinum producer, has killed 44 people over the past week. Striking workers are facing the deadline of returning to work on Monday, otherwise they may be dismissed.
Spot platinum hit $US1,474 an ounce, its highest since early July, before easing to $US1,472 an ounce by 0243 GMT, after rallying more than 5 per cent last week, fuelled by worries that the violence would disrupt supply from South Africa.
The gold-platinum premium dropped to below $US150 an ounce, its lowest since early July, after hitting a record above $US230 just last week as grim economic prospects weighed on platinum while gold remained supported by hopes for more monetary stimulus from central banks around the world.
"If things in South Africa calm down, we may see the gold-platinum spread widen again, because the demand for platinum group metals is not good," said Peter Fung, head of dealing at Wing Fung Precious Metals in Hong Kong.
As the gold-platinum spread shrank to a multi-week low, some investors may start to reverse their recent trading strategy of buying platinum and selling gold, he added.
Gold awaits policy clarity
Spot gold gained 0.1 per cent to $US1,617.24 an ounce by 0243 GMT. US gold futures contract for December delivery was little changed at $US1,619.70.
Gold investors are still waiting for clear signals from central banks on what they plan to do to shore up the fragile economies.
US consumer sentiment improved in early August to the highest in three months, adding to the argument that the US Federal Reserve may not need to launch another round of bond purchases any time soon as the economy has shown signs of stabilisation.
Hedge funds and money managers cut their net long position in US gold futures and options for a second consecutive week, as investors reduced their bullish bets because of doubts over more monetary stimulus by the Federal Reserve.
But holdings of the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.9 per cent to 1,274.739 tonnes by Aug. 17, the highest since July 9.