NEW YORK, Oct 20: Platinum futures in New York set a lifetime contract high on supply fears and gold contracts hit $770 an ounce early on Friday, but the precious metals erased initial gains to finish mostly flat as the dollar recovered and crude oil slid.

It’s profit taking for all the metals today. The dollar’s starting to come back off its low. Gold was a little bit soft, so platinum is taking its cue from there. Also, the crude’s breakdown is helping us to come off, said Ralph D’Esposito, a NYMEX floor trader at RJ Futures in New York.

Most-active January platinum on the New York Mercantile Exchange settled up $1 at $1,448.6 an ounce, after setting a record high of $1,459.20. Spot platinum was quoted at $1,441/1,446. It set a lifetime high of $1,454 earlier.

The fundamentals still pertain to higher platinum, D’Esposito said, citing a possible work stoppage in South African mines. He said platinum futures could test $1,500 an ounce but near-term corrections were possible.

Anglo Platinum the world’s biggest platinum producer, said on Friday it expects to lose 1,300 ounces of refined platinum daily after shutting shafts at its largest mine. South Africa’s 300,000-member National Union of Mineworkers said on Thursday it had formally applied to hold a one-day strike to protest what it terms a “genocide” unfolding at mines.

Angloplat suspended output at its Rustenburg mine for about seven days in June due to safety concerns after five workers were killed in an accident. The shutdown was expected to cut 2007 refined platinum production by 10,000 to 15,000 ounces.

Angloplat’s Rustenburg operations produced 942,000 ounces of refined platinum last year. South Africa is the world’s biggest platinum producer by far.

COMEX December gold on the COMEX division of the New York Mercantile Exchange finished down 30 cents at $768.40 an ounce, trading between $762.40 and $776.90.

Joseph Guzzardi, a COMEX floor trader at Sabin Commodities in New York, said that market sentiment was still bullish because many investors had added their long positions in gold futures at lower levels and they would not sell after a small pullback.

At these levels here I thought we would get a little correction. But every time I say that, we go higher, Guzzardi said.—Reuters