Commodity investors are switching money into precious metals other than gold, lifting palladium prices to their highest in 11 months on Wednesday and platinum towards a 25-1/2-year high.
"There was a wave of new money coming into the commodities complex," said Jeremy East, global head of precious metals at Commerzbank. "This trend will probably continue."
He said relatively less liquid markets such as platinum and palladium could move sharply given a comparatively small shift in investment, but noted a rise in physical demand.
Fund buying drove palladium, a platinum group metal used mainly in jewellery and in catalysts to clean up auto exhausts, as high as $220 an ounce, before the market eased slightly to $218/223. It was at $213/217 late in New York on Tuesday.
Dealers were bullish, citing the prospect of more demand in China, where many consumers have shifted from platinum to its sister metal.
"Gains in Tokyo are supporting the price. We saw some buying in Asia because people think jewellers and auto makers are using more palladium," said one dealer in Tokyo.
Platinum touched $941 an ounce before finishing European trade at $940/944 in Europe, compared with $936/939 in the US market overnight.
GOLD STEADIES:
Spot gold was at $472.10/472.80 an ounce by 1452 GMT in European trade, compared with $472.20/473.00 last quoted in New York on Tuesday, when it rose more than $7.
Gold was gaining strength on worries about inflation and the US economy. It rose to a near-18-year high at $480.25 two weeks ago, before profit-taking kicked in, dealers said.
"I think we will see gold by the end of the week or early next week up at $480," said Peter Hillyard, head of metals sales, Europe, at ANZ Investment bank.
"Reasons don't change, it's just the extent of buying," he said, referring to increased buying of safe-haven gold by funds on inflation worries and other concerns.
The day also witnessed some financial results, with Newmont Mining Corp, the world's biggest gold producer, saying third-quarter profit fell slightly on labour pressures and higher energy costs.
Net earnings were $126 million compared with $129 million in the same quarter last year, the Denver-based company said.
The world's second-biggest gold producer, AngloGold Ashanti, posted a sharper than expected fall in adjusted third-quarter earnings per share on Wednesday.
Silver earlier touched $7.86, near a recent 10-month high of $7.88 an ounce. It later retreated to $7.82/7.85 versus $7.78/7.81 in New York.