US platinum rallies above $2,000; gold inches up

NEW YORK, Feb 15 (Reuters) - U.S. platinum futures scaled a record high
for the 12th straight session Friday on the back of supply worries from top
producer South Africa, but traders warned that a sharp pullback could be
possible after the metal's breakneck rally.

Gold contracts climbed slightly on persistent inflation worries and as
investors fled to gold as a safe-haven investment amid growing
uncertainties in the U.S. economy.

"We already know that platinum is a news-driven market. It's all coming
out of South Africa. If everything stays the same right now, and if the
shortfall is not going to get greater, this market will not go
substantially higher," said Ralph D'Esposito, NYMEX floor trader with RJ
Futures in New York.

At 10:40 a.m. EST (1540 GMT), the active NYMEX platinum contract for
April delivery PLJ8 was up $51.10 or 2.6 percent at $2,057.00 an ounce
after hitting a record high of $2,075.00 in overnight trade. Spot platinum
<XPT=> fetched $2,054/2,064.

South Africa's state power company Eskom said Thursday it would
increase coal purchases and buy back electricity from those industrial
users able to reduce consumption under a plan to address crippling
shortages. [ID:nL14251539]

Power cuts have hit South Africa hard since early January, forcing
mines to shut for five days last month.

D'Esposito said that even if Eskom went back to producing at full
capacity for only a week or two, the platinum market could be vulnerable to
a sharp pullback of as much as $200.

"Unless something (positive news) is coming out of Eskom, the market is
going to go higher. But you are better off getting caught short than
getting caught long right now," D'Esposito said.

Supply fears and strong investment interest has sent platinum's end
users -- including automakers, jewelers as well as investors from banks to
exchange-traded funds -- scrambling for the metal, bidding up prices in an
already tight market.

The April contract has now rocketed nearly than $600 or 40 percent
after hitting a bottom of $1,506.10 on Jan 22.

Platinum's major industrial use is in catalysts, particularly in diesel
vehicle catalysts, as it helps clean environmentally damaging fumes from
motor exhausts. Its popularity in jewelry has expanded in recent years,
especially in China.

For sister-metal palladium, however, the NYMEX March contract PAH8
eased 85 cents to $440.35 an ounce. Spot palladium <XPD=> fetched
$438.50/442.50.

GOLD UP SLIGHTLY

Gold contracts eked out slight gains as higher energy prices prompted
inflation worries. U.S. crude futures CLc1 were up about $1 above $96 per
barrel in late morning dealings.

The gold contract for April delivery at the COMEX division of the New
York Mercantile Exchange GCJ8 rose $1.40 to $912.20 an ounce. It peaked
at $919.00 after bottoming at $910.80.

George Gero, vice president of RBC Capital Markets Global Futures in
New York, said that buying in gold was steady on perennial economic worries
and possible further rate cuts ahead of the long U.S. weekend.

Markets will be closed Monday in observance of U.S. Presidents Day.

Liquidation and short-covering could be seen and an increase in
volatility could be possible in the near term, Gero said.

Spot gold <XAU=> was quoted at $909.55/910.25 versus Thursday's New
York close of $907.10/907.90. London bullion dealers fixed the afternoon
spot price at $912.50.

COMEX March silver SIH8 was up 8.50 cents at $17.340 an ounce,
trading between $17.240 and $17.520.

Spot silver <XAG=> was at $17.30/17.35 compared with its last Thursday
quote of $17.24/17.29. London silver was fixed at $17.38.
(Reporting by Frank Tang; Editing by John Picinich)