Gold rose on Thursday to a two-week high and platinum group metals rallied to their highest in more than 20 months as fresh investment money poured into commodities.

A shutdown this week of a smelter at the world's third biggest platinum producer, Lonmin (LMI.L), has also buoyed platinum to its highest since August 2008 and palladium to its firmest since March 2008.

Bullion rose despite the currency markets, where the euro was steady versus the dollar but the U.S. currency hit a three-month high against the yen.

Spot gold rose to $1,127.75 an ounce, its highest since March 17, and was at $1,126.60 an ounce by 1530 GMT, versus $1,112.80 an ounce late in New York on Wednesday.

It's benefiting from the beginning of the quarter with new fund money and fresh buying coming in, said Jesper Dannesboe, senior commodity strategist at Societe Generale.

Investor interest looked to be the theme across several commodity markets, where copper touched a 20-month high and oil rallied to an 18-month high.

Still not big volumes but enough to push it higher. Also increasing is the number of investors and speculators thinking that 'the base metals are going higher so maybe there's some upside in gold', he said.

Bullion ended the first quarter more than one percent higher on buying driven by volatile currencies, firm stock markets and oil as well as euro zone debt but it has struggled to sustain gains since hitting a record above $1,200 an ounce last December.

Commodities as a group are extremely strong at the moment, said RBS metals analyst Stephen Briggs. We had lots of quarter-end massaging going on and that has set us up for probably more money coming into commodities.

DOLLAR IS UP, SO IS GOLD!

Analysts look divided on gold's prospects as some believe bullion's gains will be capped due to the strong outlook on the dollar, while some believe that relationship is no longer valid.

Gold versus euro/dollar is broken, if you look longer term. It could be the case for intra-day movements maybe, Dannesboe said. We think this year dollar is going up and gold is going up, he said.

U.S. gold futures for June delivery gained $3.30 an ounce to $1,117.8 an ounce. Gold traders also cited some physical activity, which supported bullion.

Bullion markets in Singapore, Indonesia, India, Hong Kong and Australia will be closed for Good Friday but Japan is open and investors will be waiting for U.S. non-farm payrolls that could set the tone for currencies.

Analysts are expecting the government payrolls report on Friday to show the economy added 190,000 jobs in March, albeit aided by temporary government hiring for the 2010 U.S. Census.

Spot platinum traded at $1,667 an ounce versus Wednesday's $1,641.50 an ounce while palladium was at $489.50 an ounce versus $477.50.

Palladium and platinum ended the first quarter 17 percent and 12 percent higher respectively, surpassing the single-digit gains posted by gold and silver.

Obviously an accident at the Lonmin smelter helped but actually it's more of a general sense that the market likes the PGMs, Briggs said.

A recovering auto industry led by China is also another factor boosting platinum group metals (PGM) prices. More than half of the world's output of platinum group metals is used in catalytic converters which clean exhaust fumes from vehicles.

Silver was at $17.90 an ounce, after hitting $17.93 an ounce, its highest in 10 weeks, compared with Wednesday's $17.46 an ounce.

(Reporting by Humeyra Pamuk, Editing by Anthony Barker)

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