LONDON, Feb 25: Gold advanced on Monday to trade just below a recent historic high on investor buying, but pared gains later as the dollar rose against the euro, traders said. Silver eased after hitting a 27-year high above $18, while platinum slipped after moving towards its record high. Palladium rose more than 2 per cent and traded above $500 an ounce.

Gold rose as high as $951.90 before falling to $947.15/947.85 an ounce against $943.70/944.50 in New York late on Friday and a recent record high of $953.60.

There are still some orders in the market and we are very close to the highs, so I think funds and speculators would try to push gold to new highs. Technically, also, it looks good, said Michael Kempinski, senior metals trader at Commerzbank.

A firmer dollar makes gold costlier for holders of other currencies and often lowers bullion demand. The metal is also generally seen as a hedge against oil-led inflation.

Platinum steadied after rising towards last week’s record high of $2,192 an ounce. The metal was last quoted at New York’s $2,148/2,152 late on Friday.

In January, the world’s biggest platinum and major gold mines were forced to halt for five days as South African power utility Eskom restricted firms to 90 per cent of normal supply, leading metal producers to forecast declines in output.

Platinum and palladium have been the world’s best performing commodities in terms of spot price performance so far this year.

This reflects the ongoing power shortages in South Africa, said Michael Lewis, head of commodities research at Deutsche Bank.

Platinum and palladium prices have jumped more than 40 per cent this year.

In industry news, South Africa’s Gold Fields forecast that gold production for the third quarter would fall between 20 and 25 per cent compared with the December quarter due to the electricity crisis in the country.

Harmony said it saw output in its current third quarter to remain flat at 12.4 tons of gold, saying one of its mines would compensate for the impact of the power crisis.

Silver rose as high as $18.15 an ounce before falling to $18.06/18.11, versus $17.98/18.03 in New York. —Reuters