Platinum rose to a three-month high on Tuesday, rallying for a sixth straight session as funds bought heavily due to a mine labor crisis in South Africa that sparked supply fears.
Platinum received a strong boost after Anglo American Platinum plans to shut two South African mines and cut 14,000 jobs, risking a repeat of last year's violent strikes as the world's largest producer of the autocatalyst metal struggles to stem losses.
The move is expected to cut output by around 400,000 ounces annually, or around 1 percent of total supply in an extremely tight market due to strong demand by U.S. and Chinese automakers.
Platinum has rallied more than 8 percent in just the last six sessions, sending the metal into an overbought territory. The surge in platinum also propelled prices above that of gold for the first time in almost a year.
"Platinum is going to have continuous price appreciation because there are some very serious labor issues that are not going to let up at all,'' said Jeffrey Sica, chief investment officer at SICA Wealth Management.
Spot platinum was up 1.3 percent at $1,676.50 an ounce, having earlier touched $1,699.50, its strongest since Oct. 9. Year to date, the metal is up almost 10 percent.
U.S. April NYMEX platinum futures settled up $31.70 at $1,689.90 an ounce, with trading volume nearly doubled its 250-day average, preliminary Reuters data showed.
On technical charts, spot platinum's relative strength index (RSI) shot to 75, above 70 in an area traditionally considered by analysts as overbought.
Platinum miners have been under intense pressure, hit by a wave of strike action in the last year while contending with rising operating costs and stubbornly depressed prices.
"Anglo Platinum will not be the last company to cut output,'' S.P. Angel analyst John Meyer said. ``We would expect platinum miners to pull back by 25 to 30 percent, which is going to have a severe impact on prices.''
Platinum was trading at a premium to gold for the first time since March, after it traded at a historically unusual discount to the yellow metal for much of last year.
Gold Up on Platinum, Bernanke
Platinum's rise lifted other precious metals, with palladium hitting its highest since last March at $717.50. Spot palladium was last at $707, up 0.9 percent on the day.
Gold prices also found support from a looming battle in Washington over the government's borrowing limit, a day after Federal Reserve Chairman Ben Bernanke discussed the negative economic effects of any failure to agree to a higher ceiling.
(Read More: Gold May Be Down, but Bulls Aren't Counting It Out)
Silver rose 1 percent to $31.33 an ounce.