Platinum ended a record-setting streak on Wednesday after 14 straight days of gains as profit-takers stepped in, but analysts said it was likely to recover after a pause because of persistent supply problems.

The metal fell more than 3 percent, after surging 43 percent in less than a month on worries the market deficit would widen sharply this year following output losses in top producer South Africa due to an electricity supply crisis.

Platinum fell as low as $2,065 per ounce and was quoted at $2,074/2,084 at 9:55 a.m. EST, against New York's close of $2,140/2,150 on Tuesday, when it hit a record high of $2,160.

Palladium rose to a 6-1/2-year high before falling, while gold shed 1.5 percent as the dollar rose.

The platinum market is down on profit-taking. We have had a strong price rise in a very short period of time, so if you have a phase of consolidation coming through, that will not surprise me, said Michael Widmer, metals analyst at Lehman Brothers.

But I still think that we are going to go higher. The demand-supply deficit will continue to support the market.

Platinum surged this year after mines in South Africa, which account for 80 percent of the world's supply, ground to a halt for 5 days at the height of last month's power crisis.

The mines now get 90 percent of normal supply and analysts said it would take years to normalize the situation.

The world's No. 1 platinum miner Anglo Platinum has said power problems would cut output by 120,000 ounces in 2008, while Impala Platinum, the world's No. 2 producer, forecast very tight market conditions.

Analysts say the global platinum deficit could widen to 500,000 to 600,000 ounces by the end of 2008, compared with about 265,000 ounces in 2007. The market had a surplus of 65,000 ounces in 2006, following seven successive years of deficits.

We continue to recommend investors (to) look to hold onto their core long positions in platinum and would 'bang the table' to buy a lot more below $1,900/oz, UBS Investment Bank said.

Nimble traders could try and trade around this position, but there are clear risks that selling into what might look like a short-term top may mean never getting back into this trade, it said in a client note.

GOLD SLIPS

In other metals, gold fell more than $10, or 1.5 percent, to $913.30 per ounce from $927.00/927.80 late in New York on Tuesday, as the dollar rose after data showed U.S. inflation rose in January, casting doubt on expectations the Federal Reserve will cut interest rates sharply.

It quickly rebounded, and was quoted at $919.80/920.40 by 10:14 a.m. EST. Many analysts believe the metal was likely to set new highs.

Having been through a period of consolidation, gold is now extremely well placed to set a fresh record high as investors continue to seek the metal's anti-inflationary and safe-haven attributes, said James Moore, analyst at TheBullionDesk.com.

Silver edged down to $17.32/17.37 an ounce from $17.36/17.41, while palladium rose up to $495 an ounce before falling to $473/478 an ounce, versus $491.00/494.00.

Platinum slipped in other markets also. The December 2008 contract on the Tokyo Commodity Exchange ended 175 yen per gram lower at 6,965 an ounce. It briefly hit a new record of 7,207 yen before tumbling to a low of 6,901 yen.

Analysts said the exchange's plan to raise margins triggered profit-taking in Asia. It will raise the level by 50,000 yen per platinum contract for all new and existing positions from Thursday until the end of the month to cope with volatility.

(Additional reporting by Lewa Pardomuan in Singapore and Daniel Magnowski in London)

(Editing by Chris Johnson)

South Africa