Speculators flocked into platinum on Wednesday after prices tumbled to a six-month low the previous day, while gold dropped to its lowest level in seven weeks before bargain hunters resurfaced.

But worries about falling demand for autocatalysts and poor car sales capped gains on platinum. Gold was under pressure from weak oil as well as a rising U.S. dollar, which prompted investors to ditch bullion exchange-traded funds.

Spot platinum hit a high of $1,575 an ounce, up from $1,563.00/1,583.00 late in New York on Tuesday, when it hit an intraday low of $1,517 an ounce, its weakest since January 22.

“Technical wise, it’s oversold. I do believe we will see some relief buying within the next one week,” said William Kwan, bullion director at Gold Capital Management in Singapore.

Platinum prices have taken a dramatic turn since spiking to a record high above $2,000 an ounce in early March, losing much of their gains to profit taking and a slowing U.S. economy that threatens to slash demand for autocatalysts.

“Investors or speculators have entered the market. But at this moment, buying is not big,” said Yukuji Sonoda, analyst at Daiichi Commodities in Tokyo.

Retail investors re-entered Tokyo futures, but there was still an absence of buying interest from jewellers and automakers in Japan, said Sonoda.

“Anyway, platinum prices have decreased so much, so anytime automobile companies change their minds, they will start to buy little by little,” he said.

Palladium, which tracks movements of sister metal platinum, also bounced after sliding to its lowest level in eight months the previous day.

The most active Tokyo platinum contract for June 2009 delivery on the Tokyo Commodity Exchange rose 109 yen per gram to 5,435 yen after tumbling by the 300 yen daily limit the previous day.

Gold edged up to $878.25/879.20 an ounce from $876.35/877.95 late in New York. It hit an intraday low of $872.35 an ounce on Wednesday, its lowest level since June 16.

“Market participants who are still long might be looking for opportunity to offload their positions that are above $900,” said Kwan of Gold Capital Management.

“Any spike towards $900 will be met by selling pressure for those who want to get out of their stale positions.”

Bullion holdings held by SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, dropped to a one-month low around 659 tonnes, down from an historic high around 705 tonnes in mid-July..

The dollar touched a seven-week high against the yen on lower oil, which helped offset any disappointment the market may have felt over slightly diminished prospects of an interest rate hike by the Federal Reserve.

New York gold futures added $0.6 to $886.70 an ounce.

Spot palladium rose to $349.00/357.00 an ounce from $346.00/354.00 late in New York. Silver edged up to $16.55/16.61 an ounce from $16.45/16.53 late in New York.