Market analysts are expecting the platinum price to remain strong during the rest of the year but are unlikely to revisit the 24-year peak witnessed in April of $942.00 an ounce.

According to the latest commodity price forecast survey from Reuters, strong fundamentals are expected to keep platinum prices firm even though supply shortfalls might ease, while palladium's dependence on speculators may cap its price.

Analysts explained that predictions of platinum being replaced by palladium in catalysts for diesel-powered cars were premature.

"Platinum remains the metal with the strongest fundamental background. Nevertheless we consider it will get closer to a balanced market," Dresdner Kleinwort Wasserstein stated.

"Since industrial consumers already purchased during the recent corrections they are not forced to buy at any price."

The analysts surveyed forecast an average platinum price for 2004 of $834 an ounce, which is up more than 20 per cent on 2003, before dropping to an average $805 in 2005.

This average masks a range of predictions, with the highest for the third quarter 2004 offered by Numis Corp at $925, which also gave the equal highest forecast for the fourth quarter at $935 (equalling The Bullion Desk).

Meanwhile the lowest forecasts were $780 an ounce for the third quarter of 2004 (Barclays Capital) and $770 for the fourth quarter (CPM Group).

Predictions for palladium prices averaged $240 for 2004 - up 20.9 per cent year-on-year - before rising further to $250 in 2005.

The highest forecast for the third quarter of 2004 was made by CPM Group at $275 an ounce, with the highest for the fourth quarter at $300 (Numis Corp).

The most pessimistic were Dresdner and The Bullion Desk, which predicted a low of $210 for the third quarter, while Barclays Capital & The Bullion Desk offered the lowest forecast for the fourth quarter at $210.