Gold futures ended higher and platinum rose on Monday after mostly upbeat U.S. data signaled the economic recovery is gaining traction, with a soft earnings update from the world's biggest platinum miner and strong monthly U.S. car sales reports adding to support.
Palladium hit its highest in 17 months and platinum a four-month peak at $1,705.25. Gold steadied as traders repositioned investments after a broadly positive run of U.S. data, while a dip in stock markets and a stronger dollar added pressure.
Spot platinum was last up 0.8 percent at $1,695 an ounce, while spot palladium was last down 0.1 percent at nearly $755 an ounce, having earlier hit a high of $759.75.
Spot gold last rose 0.5 percent last at $1,675 an ounce. Gold futures settled $5.80 higher at $1,676.40 an ounce.
(Read More: Gold or Platinum - Which Will Get to $2,000 First?)
A dip in stock markets and the euro removed some support for gold, while data released on Friday showed hedge funds and money managers had slashed gold's net length in futures and options last week on signs of a steadily improving U.S. economy.
"Futures and options investors are on the retreat, pulling money from the gold market and putting it in more cyclical markets (like platinum and palladium) which benefit from the stabilisation of growth," Tobias Merath, global head of commodity research at Credit Suisse, said.
The latest Commitments of Traders data for the week to January 29 showed a 2.89 million ounces decrease in net long speculative positions in gold to 16.7 million ounces from the previous week.
Speculators boosted both platinum and palladium's net length, essentially bullish bets, to record highs.
Gold players were seen reassessing their positions after last week's mixed U.S. economic data failed to provide a clear direction for the market, analysts said.
U.S. payrolls numbers on Friday surprised to the downside, triggering a $10 jump in the metal, but these were offset by strong consumer confidence and ISM manufacturing numbers, and comments from a Federal Reserve official suggesting that monetary easing could be scaled back later this year.
"Gold is without structural support at the moment, but given speculative positioning remains relatively light, weaker-than-expected macro data could quickly spur prices higher amid global balance sheet expansion," Barclays Capital said in a note.
US Car Sales, Amplats Lift Platinum
Platinum group metals posted strong gains after U.S. automakers reported a 14.2 percent sales increase in January from a year earlier, with a seasonally adjusted annualized rate of sales reaching 15.29 million vehicles.
The metals are widely used in auto catalysts to clean up exhaust emissions.
Momentum picked up when major producer Amplats revealed a significant full-year loss on Monday. The company has cut its output target to 2.1-2.3 million ounces a year and has slashed capital expenditure by 11 billion rand ($1.2 billion). It plans to cut capex by 25 percent over the next decade to 100 billion rand.
Platinum has outperformed the rest of the complex with a nearly 11 percent gain so far this year, followed by a 9 percent rise in palladium. Gold is down 0.3 percent — the only precious metal in the red after a 12-year winning streak.
"For as long as economic optimism retains the upper hand, however, industrial precious metals will doubtless continue to be given preference over the safe haven of gold," Commerzbank said in a note.
Buying interest in Asia is likely to lend support to gold prices this week, as China approaches the week-long Lunar New Year holiday that starts on Saturday, Feb. 9, but traders said this was likely to be temporary.
"Physical demand is reasonably good because the Chinese New Year is round the corner and will continue to hold the market this week, but next week Asian markets will be on holidays and that source of support will disappear," Bernard Sin, senior vice president at MKS SA, said.
"Markets may react dramatically."
Silver last fell 0.3 percent to $32 an ounce.