LONDON, Feb 3: Platinum soared to a record high on Friday, piggybacking recent soaring gold prices and getting a lift from strong demand, while gold itself marked time, traders said.

The bullish sentiment also lifted palladium, sister metal to platinum, to a new 21-month high, while silver traded near this week’s 22-year peak.

Spot platinum rose $1,083 an ounce, mainly driven by a rally in Japanese futures.

Gold prices are strong and strengthening and this seems to indicate the strength of investment interest in commodities and precious metals, said Jeremy Coombes, general manager of marketing at precious metals refiner Johnson Matthey.

The metal, used in jewellery and to clean car exhaust fumes, was quoted at $1,078/1,082 by 1048 GMT, higher than $1,078/1,083 late in New York on Thursday. Platinum has gained nearly 12 per cent since the start of 2006.

The (platinum) market is well balanced (but) not very well stocked because of the deficits of the past few years... Investment interest is taking the price beyond the level we expected, he added.

Precious metals, led by gold, have rallied on investors seeking to diversify their assets because of tensions in the Middle East over Iran’s nuclear intentions, dollar instability and firm oil prices.

In Japan, investors who have reaped big returns from trading stocks, have been shifting part of their funds into gold and other commodities to earn larger profits.

Palladium rose to its highest level in more than 21 months at $314 before retreating to $312/317 an ounce, still higher than New York’s $305/310 an ounce.

Sentiment towards the precious metals complex remains overwhelmingly bullish, which is hardly surprising given the strength of the price action, said Alan Williamson, head of commodity research at HSBC Bank.

Gold dropped from its highest in 25 years at $574.60 the previous day on Middle East tensions and firm oil prices. Spot was at $572.60/573.35, against

New York’s $572.45/573.15 an ounce.

Silver stood at $9.84/9.87 an ounce, up from $9.79/9.82 in the US market. It rose to a 22-year high at $9.92 this week.—Reuters