(REUTERS) -- Gold jumped to a three-month high on Wednesday, reversing early losses after bullish technical factors triggered fund buying, and platinum prices hit their highest in five months on supply worries.

Platinum outperformed gold's 1 percent gain, rallying 2 percent on the prospect of shortage driven by a labor dispute in South Africa, the world's top platinum producer.

Bullion turned positive late in the session and accelerated upwards once it breached technical resistance near $1,765 an ounce, an important area on price charts where two rallies failed since December.

We are seeing all the funds step in. It (technical buying) is the only thing at the moment that we can pin it on, said Frank McGhee, head precious metals trader at Integrated Brokerage Services LLC.

Spot gold was up 1.1 percent at $1,777.98 an ounce by 3:13 p.m. EST (2013 GMT), having earlier hit a three-month high of $1,781.40.

Rick Bensignor, chief market analyst at Merlin Securities, said gold's rally to three-month high triggered pre-established orders to buy on the way up to stop losses as well as enter positions to capitalize on the momentum.

However, he added that gold is not far from a near-term peak between $1,780 and $1,805 an ounce.

Gold's counter-trend model suggests that this...is not necessarily a true breakout, Bensignor said.

U.S. gold futures for April delivery settled up $12.80 an ounce at $1,771.30, with trading volume largely in line with its 30-day average, preliminary Reuters data showed.

Gains in crude oil and grain prices, and rising geopolitical tensions between Iran and the West also lent support to gold.

Bullion has benefited from expectations for further easing by China and news China's central bank might have bought gold to add to its reserves also improved sentiment.

The metal already received a strong boost after the U.S. Federal Reserve last month said it would keep rates near zero at least until late 2014.

PLATINUM HIT FIVE-MONTH HIGH

Meanwhile, platinum prices rallied to a five-month high at $1,723.50 an ounce, lifted by ongoing labor unrest at one of the world's biggest platinum mine Rustenburg in South Africa owned by Implats Platinum (IMPJ.J).

Bill O'Neill, partner of commodities investment firm LOGIC Advisor, said that the supply woes are likely to exacerbate platinum's market deficit in 2012, and the price of platinum could exceed that of gold very soon.

Spot platinum was up 2.1 percent at $1,719.77 an ounce.

Platinum narrowed what has been an historically unprecedented discount to gold to around $40 from $230 in January. Platinum traded as low as $1,340 an ounce on December 29.

Implats, the world's No. 2 platinum miner behind Anglo American Platinum (AMSJ.J), has warned customers that its April platinum deliveries would be down by a half.

Among other precious metals, silver was up 0.2 percent at $34.35 an ounce, spot palladium was up 1.3 percent at $717 an ounce.