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LONDON (Thomson Financial) - Platinum stayed close to an all time high struck earlier today as South African mining woes squeezed supply, while gold traded some 4 pct below a record hit late last week.

Platinum also dragged palladium up to a six-year high as the two metals can be used for the same purposes -- jewellery manufacturing and in catalytic converters.

"The most important recent development in the precious metals market is the power crisis in South Africa, which has interrupted mining operations and which, based on our estimates, will visibly alter the supply/demand balances for gold and (especially) platinum this year," said HSBC analyst James Steel, who today upgraded the bank's price forecast for 2008 to 1,650 usd from 1,550 usd.

By 2.32 pm platinum was at 1,775 usd per ounce against 1,769 usd in late New York trades Friday. Earlier this morning, the metal made a new all time high of 1,792.50 usd per ounce.

South African mine production and precious metal output still remains vulnerable to the national power company Eskom's implemented powercuts. Eskom last week said it was able to supply 80 pct of power to gold, platinum, diamond and coal miners having initially promised to meet 90 pct of their needs.

South Africa, the world's biggest platinum producer, supplies around 80 per cent of global platinum output.

"We see yet more upside for platinum," said Standard Bank analyst Walter De Wet.

Platinum has gained some 20 pct in around two weeks.

"We estimate the platinum market will be in a substantial deficit in 2008 due to South Africa's power-related output issues and increasing automotive demand," said Steel at HSBC.

Palladium was trading at 412 usd against 414 usd per ounce, having earlier hit 420.50 -- a six year high.

"Although demand from the automotive sector continues to be impressive, we expect the palladium market to remain mired in surplus as a result of the steady sale of Russian stocks," said Steel.

Gold was trading at 892.43 usd per ounce against 908.80 usd in late New York trades Friday. On Friday gold hit a record high of 936.60 usd.

"There are some downside risks to the gold spot price with futures markets pricing in further gains in the Dow Jones and a decline in net long speculative positions in gold," said De Wet.

Gold could move lower if equity markets rebound as some market players will sell off safer assets and increase their exposure to risk.

"Stock markets have recovered somewhat from their recent battering and markets in Asia and Europe were up overnight and today. The primary reason for gold's weakness remains that it had become overbought in the short term and was due a correction, in the same way the stock markets were oversold in the short term and due a correction," said Mark O'Byrne, director at Gold and Silver Investments.

In other precious metals, silver fell to 16.40 usd an ounce against 16.82 in late New York trades Friday.