* Liquidity in gold market light due to Lunar New Year
holiday
* CME raises platinum futures margins by 10%
* Platinum set to reach $1,300/oz by end-2021 -Citi
(Adds analyst comments, details and updates prices)
By Asha Sistla
Feb 11 (Reuters) - Platinum prices rose to their highest in
more than six years on Thursday, extending a solid run on market
hopes that an economic recovery would boost demand from the
automobile sector.
Platinum XPT= rose 1.3% to $1,257.51 an ounce by 1043 GMT,
having earlier jumped as much as 2.2% to its highest since
January 2015. Palladium XPD= also firmed 0.2% to $2,361.04 per
ounce, not far from a near three-week high hit on Wednesday.
Both metals are used by automakers in catalytic converters
to clean car exhaust fumes.
"The market has been looking beyond the pandemic - to a
recovery in the auto sector, which will eventually happen," said
StoneX analyst Rhona O'Connell.
The market will draw support from potential demand for fuel
cells, with the Johnson Matthey report also talking about
increased loadings, particularly for diesel vehicles, O'Connell
said.
Platinum may see a third consecutive annual deficit in 2021,
specialist materials firm Johnson Matthey said in a report
released on Wednesday. Potential concerns about mining production in South Africa
still remain, even as fuel cell vehicles are set to become
mainstream, with Hyundai Motor Group hiking their demand for
platinum-based fuel cell stacks, O'Connell said. Citi Research analysts said they expected platinum prices to
"grind higher through 2021 to $1,300 an ounce by the end of the
year," on a rebound in industrial and investment demand.
Meanwhile, the CME Group raised margins for platinum futures
by 10%. This is a typical move by exchanges to mitigate risks as
price volatility increases. Spot gold XAU= edged 0.1% lower to $1,841.28 per ounce.
U.S. gold futures GCv1 were trading flat at $1,842.90.
Spot silver XAG= rose 0.5% to $27.13 an ounce.
"Low liquidity due to Chinese new year holiday is weighing
on prices," said DailyFX strategist Margaret Yang.
Investors also kept a close watch on developments on the
passage of a $1.9 trillion U.S. stimulus bill.
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