Platinum prices were largely unchanged in Europe on Tuesday despite a positive industry report, staying below the previous day's near-26-year high.
Precious metals refiner Johnson Matthey said the platinum market was set to remain in deficit for the seventh year in a row in 2005 and prices could rise up to $1,030 an ounce during the next six months.
It said in a widely followed report that prices were not likely to drop below $890 an ounce in the next six months, unless demand from jewellery makers fell more sharply than expected.
Alan Williamson, metals analyst at HSBC Bank, said the report did not surprise the market as the projected deficits were on the expected lines.
"They suggested the price could go up, which was marginally encouraging. But at the same time, they also suggested that it could go down if the funds abandoned the market."
Platinum was quoted at $967/972 an ounce by 1630 GMT, down from $970/974 last quoted in New York.
The metal rose to $973 on Monday, its highest since March 1980, on fund buying on expectations of greater demand for catalytic converters. The platinum market has been in deficit since 1999.
"The bullish trend has not changed, with fund money heavily heading into the market," said Shuji Sugata, assistant manager at Mitsubishi Corp Futures Ltd.
Sister metal palladium was quoted at $244/248 an ounce, off New York's $249/253 an ounce and below an 18-month high of $255 hit on Monday.
Johnson Matthey said the surplus between supply and demand of palladium was expected to fall by more than 50 percent to 650,000 ounces in 2005 from the previous year because of a 6 percent growth in demand to 6.89 million ounces.
Spot gold was steady at $467.70/468.50 an ounce, versus New York's $467.60/468.40. Gold hit a near-18-year high of $480.25 in mid-October and has struggled to return there since.
The market also took note of news that an official of France's central bank said the European central banks' agreement to limit gold sales might be extended when it expires in 2009.
"I think the spirit is there, I suppose it will go on, but we will have to see," Isabelle Strauss-Kahn, director of market operations for the Banque de France, told a precious metals conference in Johannesburg.
In September 2004, the Central Banks Gold Agreement was renewed for a second five-year term, limiting sales over the period to 2,500 tonnes.
HSBC's Williamson said there was no great surprise as the first central bank gold agreement worked quite well and the current agreement also appeared to be working well.
Silver fell to $7.70/7.72 from $7.74/7.76, way off its high for the year of $7.88, which it hit twice in October.