PRECIOUS-Platinum up for 7th day as South Africa crisis stirs supply fears
* Platinum trades at premium to gold for second day
* Posts 9 pct rise over past seven sessions
* Platinum's technical RSI shows market overbought
* Germany plans to repatriate gold held in U.S., France
(New story, changes byline, dateline, pvs LONDON) NEW YORK, Jan 16 (Reuters) - Platinum rose for a seventh consecutive session on Wednesday, driven by strong hedge fund buying after a mine labor crisis at the world's largest platinum producer in South Africa stirred fears of a supply shortage. The price of platinum also stayed above that of gold for a second straight day when Anglo American Platinum in South Africa said it would shut two mines and cut 14,000 jobs. The move is expected to widen the platinum market's deficit in 2013 in an already tight market due to strong autocatalyst demand. Buying by momentum-driven hedge funds and money managers has fueled platinum's 9 percent rally in the past seven sessions, sending the market deeper into an overbought territory. The U.S. EFTS Platinum Trust also posted an increase in its platinum holdings so far in January. Tim Murray, general manager of precious metals marketing at Johnson Matthey USA, said the funds still see platinum fairly cheap given what's going on in South Africa. "I will not be surprised to see a sell-off and then a rebound again. It's going to be very volatile," Murray said. Spot platinum rose 0.5 percent to $1,687 an ounce by 1:03 p.m. EST (1803 GMT), hovering near a three-month high of $1,699.50 set on Tuesday. On technical charts, spot platinum's XPT= relative strength index (RSI) shot to 77 from 67 last Friday, above 70 in an area traditionally considered by analysts as overbought. Dealers and analysts said prices were likely to stay firm, underpinned by labor strikes at three of Amplats' South African mines. The world's top producer on Tuesday announced plans to mothball shafts and cut jobs that would reduce output by around 400,000 ounces annually, or around 1 percent of total supply. The platinum market largely ignored news that Amplats miners will end an illegal walkout from Wednesday night and want talks to prevent further action. Palladium rose 2.1 percent to $723.24 an ounce.
SHORT-TERM PRESSURE FOR GOLD Gold prices was up 0.1 percent to $1,679.95 an ounce, overshadowed by rallies in the platinum group metals. Gold and platinum hit parity for the first time since March on Tuesday. Year to date, gold was up 0.3 percent, sharply underperforming platinum, which posted a 10 percent gain. The yellow metal should find underlying support in coming months from dollar weakness, which should send prices to a record average high, consultancy Thomson Reuters GFMS said.
The gold market was little changed after news Germany's central bank plans to bring home hundreds of tonnes of gold currently held by the U.S. Federal Reserve in New York and the Bank of France in Paris. Spot silver rose 0.3 percent to $31.44.
Prices at 1:03 p.m. EST (1803 GMT)
LAST NET PCT YTD CHG CHG CHG US gold 1679.70 -4.20 -0.3% 0.2% US silver 31.465 -0.064 -0.2% 4.1% US platinum 1693.80 3.90 0.2% 10.1% US palladium 726.30 12.95 1.8% 3.3%Gold 1679.95 1.45 0.1% 0.3% Silver 31.44 0.09 0.3% 3.7% Platinum 1687.00 8.75 0.5% 9.7% Palladium 723.24 14.74 2.1% 3.0%Gold Fix 1676.25 -3.50 -0.2% 0.7% Silver Fix 31.23 4.00 0.1% 4.3% Platinum Fix 1678.00 18.00 1.1% 10.2% Palladium Fix 714.00 7.00 1.0% 2.1%
(Additional reporting by Clara Denina in London; Editing by Grant McCool)