LONDON, Dec 24: Platinum hit a historic high in light festive-season trading on Monday, with speculators and industrial users buying on supply concerns and market tightness.

Gold steadied after trading in a narrow band, with investors keeping an eye on the dollar and oil for near-term direction.

Spot platinum was quoted at $1,525/1,530 an ounce against $1,521/1,525 in New York late on Friday. The metal has surged 37 percent so far this year.

Wolfgang Wrzesniok-Rossbach, head of sales at Germany’s Heraeus, said a wave of buying by speculators and long-term investors had resulted in a surge in prices in recent weeks.

The market observers are mainly pointing at the critical supply/demand picture in light of production shortfalls in South Africa and at the same time, ever-rising demand for the various industrial applications.

Long-term industrial off-take should remain high and once the current holiday related calmness ends, purchases could quickly pick up again.

Supply disruptions at some mines in South Africa, the world’s top producer, have resulted in a deficit this year and are likely to leave the market in a deficit again next year.

Aquarius Platinum said last week it lost an attributable 250 ounces of platinum group metals a day due to a strike at its Marikana mine in South Africa. Johnson Matthey, the world’s top platinum refiner and fabricator, said in November the market would change course in 2007 and see a deficit of 265,000 ounces. It had a surplus of 65,000 ounces in 2006 after seven successive years of deficits.

Given the current market tightness and the vulnerability to supply disruptions, platinum could easily surge to fresh records and is expected to remain strong across 2008, James Moore, precious metals analyst at TheBullionDesk.com, said in a report.

Growing investment into exchange-traded funds also resulted in a decline in available supplies, with the promoters of such funds buying the matching quantity to keep in vaults.

In other metals, gold was quoted at $810.50/811.20 an ounce, versus $810.50/811.30 in late New York trade on Friday.

—Reuters