LONDON - Palladium and platinum prices hit their highest since mid-2008, boosted by investment demand fuelled by the recent launch of exchange-traded funds in the United States. By contrast, gold held broadly steady but any upside progress was restricted as the dollar strengthened against the euro, with the single currency pressured after a survey of German economic sentiment came in weaker than expected. Spot platinum rose to $US1,647.50 per ounce, its highest since August 2008, and was at $US1,629.50 an ounce by 2240 AEDT, against $US1,612 quoted late on Monday. Palladium hit a high of $US461.50 an ounce, a level not seen since July 2008. It later eased back to trade flat at $US457.50 as the dollar gained traction. Gold was bid at $US1,133.20 an ounce against $US1,132.50 an ounce on Monday. US gold futures for February delivery were at $US1,132.90 per ounce, up 0.2 per cent. A US subsidiary of London's ETF Securities launched the United States' first platinum and palladium-backed ETFs earlier this month, and uptake has been healthy. "It's all about these new ETFs," commodity strategist at RBS Stephen Briggs said. He said appetite for the funds was having a disproportionate effect on the platinum and palladium markets, which are much smaller in volume terms than gold. "That is the really important thing to realise -- how really small the platinum and palladium markets are," Mr Briggs added. In addition, signs the global economy is steadying and expectations central banks may start draining ample funds from the banking system or raising interest rates later in the year are also prompting investors to buy the strategic platinum group metals. Technical uptrend? Platinum's rise may soon stall as the market consolidates its overbought position, but the technical uptrend is likely to eventually carry prices to record highs, according to analysts who study past price moves to determine future price moves. Gold prices were steady, with a rise in the dollar capping gains. Strength in the US unit curbs gold's appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other currencies. "Bullion continues to underperform when compared to other precious metals," said Andrey Kryuchenkov, an analyst at VTB Capital. "Bullion has been gradually decoupling from the precious metals sector." "Gold continues to trade off the greenback," he added. "We will be witnessing a comeback to more fundamental based trading this year." The world's largest gold-backed exchange-traded fund, SPDR Gold Trust, said its holdings stood at 1,112.836 tonnes as of January 18, unchanged from the previous day. Holdings of the trust, the world's sixth largest holder of gold ahead of China, Japan and Switzerland, have declined nearly 21 tonnes so far this year, compared to a rise of some 15 tonnes in the same period of 2009. Meanwhile gold traders in major bullion consumer India remained on the sidelines on Tuesday as high prices put off buyers, dealers said. Among other precious metals, silver prices were at $US18.61 an ounce versus $US18.61 an ounce late on Monday.

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