By Atul Prakash
LONDON, May 9 (Reuters) - Platinum jumped 4 percent to a seven-week high on Friday on investor buying ahead of the launch of platinum exchange-traded notes (ETNs), while gold hit a one-week peak on a weaker dollar and record high oil prices.
Investment bank UBS will soon launch two ETNs offering long and short trading strategies in platinum. ETNs, unlike exchange-traded funds, do not purchase physical platinum to back the number of shares sold.
According to CNBC television and NYSE Euronext exchange data, the two ETNs -- UBS E-Tracs Long Platinum ETN and UBS E-Tracs Short Platinum ETN -- will begin trading soon on the NYSE Arca platform.
"It won't have an impact on the availability of physical metal nor on lease rates," said Tom Kendall, metals strategist at Mitsubishi Corporation.
But he added that it offers another route by which U.S. mutual and pension funds, which cannot directly invest in commodity derivatives, can gain exposure to platinum.
"Fundamentally you cannot justify the kind of price move we have seen so far today. Gold and silver seem to have stalled ahead of the U.S. market open and sentiment there will have big influence on platinum," he added.
Spot platinum rose as high as $2,095 an ounce and was at $2,087.50/2,107.50 at 1032 GMT, against $2,008.50/2,028.50 in New York late on Thursday.
Dealers also reported platinum purchases in Japan, Europe and the United States as auto makers stocked up for their second-quarter requirements, but the metal was still more than $200 below a lifetime high of $2,290 an ounce hit on March 4.
"The launch of another ETF type product in the already tight platinum market triggered flurries of buying interest yesterday," said James Moore, analyst at TheBullionDesk.com.
"Given the already tight conditions and the market's nervousness towards a deeper supply deficit, we could quite easily see the metal set new highs," he said in a report.
OTHER METALS ALSO GAIN
Platinum's major industrial use is in making autcatalysts, particularly diesel catalysts, as it helps clean environmentally damaging fumes from motor exhausts. It is also used in making jewellery.
In other markets, the most active Tokyo platinum contract jumped by the daily 300 yen limit. The benchmark contract for April 2009 delivery rallied to 6,703 yen per gram, but still below a record of 7,427 yen hit on March 6.
Gold hit a one-week high of $889.80 an ounce and was last at $886.50/887.50, against $881.40/882.60 late in New York on Thursday.
In the physical market, steady purchases from jewellers in Indonesia, Thailand and Vietnam pushed up premiums for gold bars to 80 U.S. cents an ounce to the spot London prices in Singapore, from 75 cents last week .
"We are seeing a mixed picture as far as the supply side is concerned," said Wolfgang Wrzesniok-Rossbach, head of marketing and sales at Heraeus, a German precious metals trading group.
In a daily report, he said that in Europe private investors, despite the lower prices, continue to offload holdings in coins and bars to smelters, but Asians have been cutting back on the supply of gold scrap.
Gold futures for June delivery on the COMEX division of the New York Mercantile Exchange rose $5.9 an ounce to $888.
Silver rose to $16.99/17.04 from $16.85/16.91 an ounce, while spot palladium was up at $436.50/444.50 an ounce, against $430.50/438.50 an ounce.
