Platinum tracked backed in Europe on Tuesday after speculators had pushed it to a new 24-year peak in Asian trade, but dealers said that the metal's bull run was far from over.
"Platinum has come back a little bit from the $900 dizzy height level, it's in the hands of the specs with a little bit of profit-taking but that is probably not the end of the upmove," one trader said.
Fears of a supply shortage, tougher anti-pollution laws along with firm industrial and jewellery demand have supported the platinum market since last year.
The metal briefly hit $1,047.50 an ounce in March 1980, and analysts say another run above $1,000 may lie ahead. By 1144 GMT, platinum was quoted at $885.00/890.00 an ounce, compared with $900.00/905.00 last quoted in New York. The market touched $903.00 in Asia - a fresh 24-year high.
Analysts said platinum price action was spurred mainly by Japanese speculative demand on the Tokyo Commodity Exchange (TOCOM), heightening the risk of a brutal sell-off. "TOCOM players have been forced to cover some shorts overnight, adding to the buying interest and it looks as if the spec players are keen to maximise on the recent bull-run," James Moore of TheBullionDesk.com in a daily report said.
Gold, which has lagged the rally in platinum, was little changed in Europe after moving briefly above $400 in Asian trade, aided by a dip in the dollar.
The metal later settled back into a fairly tight range to last trade at $398.50/399.00, against New York's $398.90/399.60 late on Monday.
Dealers and analysts said gold was still looking to probe slightly lower levels around $395.00, which would spark more physical buying.
"Gold is set to drift between $395.00 and $404.00 until the currencies resume their past trend," said Andreas Maag of UBS Investment Bank in a daily report.