Platinum was set for its biggest one-day rally in a month on Wednesday after South African police said striking miners had blockaded roads leading to shafts belonging to number one producer Anglo American Platinum.

The gold price rose to its highest since late February after Germany’s constitutional court approved the country’s participation in the permanent euro zone bailout fund, which boosted the euro against the dollar.

A Reuters photographer at Amplats’ Bathopele mine, which is part of the Rustenburg complex, said around 1,500 stick-waving protesters demonstrated outside the facility, calling for its immediate shutdown.

Earlier, South African police said around 1,000 mineworkers had a confrontation with mine security late on Tuesday at one Amplats shaft and the situation had spread to other locations.

Amplats accounts for nearly 40 percent of global platinum supply, with around 2.5 million ounces in yearly output and its 600,000-ounce a year Rustenburg complex is the company’s second largest by production, after the Amanebult facility.

Spot platinum rose by 2.5 percent to $1,639.49 an ounce by 1122 GMT, on course for its biggest one-day percentage gain since August 16.

The price has risen by nearly 20 percent since a strike at number three producer Lonmin turned violent last month, leaving 44 dead and dozens injured in clashes between police and striking workers.

Yet a forecast surplus of metal stemming from faltering demand from the European car industry could limit further price gains, analysts said.

“The situation is delicate, very politically sensitive. But we have to sit back and take a more neutral look at the market and say this is all sentiment driven. It’s debatable as to how much of a sustained rise this will be once the dust has settled,” Societe Generale analyst Robin Bhar said.

“The market is facing quite a large surplus, anywhere upwards of 12 to 15 months’ worth of supply. You could shut the mines for a year and only then would the market come back to balance. Clearly, this is a sentiment-driven rally where people believe there is upside price risk,” he said, adding he expected the price to

South Africa produces about 80 percent of the world’s platinum. The strike at the operations of Lonmin have removed close to 60,000 ounces of supply from the market in a month.

This follows a loss of 120,000 ounces at number two producer Impala after a bloody six-week strike shuttered its flagship Rustenburg mine in January and February this year.

Implats on Tuesday said it had received a second pay bid from miners equal to an 8-10 percent hike granted in April.

And there was no end in sight to the month-long strike that has paralysed Lonmin after thousands of protesters armed with sticks and machetes marched in a dramatic show of force on Monday, vowing to hunt down and kill strike-breakers.

Platinum is used in jewellery and China is the largest consumer of the metal in this sector, but its main industrial application is in catalytic converters to clean noxious exhaust fumes from vehicle engines.

The European car industry is the world’s leading industrial consumer of platinum for use in diesel engine autocatalysts and the euro zone debt crisis has prompted governments to unleash austerity measures that have plunged the region into recession.

Even with platinum supply falling with the unrest in South Africa, the declines were unlikely to be large enough to erode a surplus this year which could be anywhere up to 400,000 ounces in size, or 7 percent of total net demand in 2011.

Gold rose for a second day, gaining as much as 0.8 percent on the day earlier to touch a session peak of $1,746.20 an ounce, its highest since February 29 and just 2 percent below the high for this year.

Spot gold rose 0.6 percent to $1,742.10 an ounce, up at 1124 GMT, leaving the premium to platinum at $102 an ounce, its smallest since May this year, while gold in euros rose 0.2 percent to 1,349.05 euros an ounce.

The euro rose after Germany’s top court gave its backing to the euro zone’s new 700 billion euro European Stability Mechanism bailout fund.

Gold tends to benefit from a rise in the euro against the U.S. dollar. This correlation is currently at its most positive, meaning the two assets are more likely to move in tandem, in nearly two months.

The focus for the gold market is squarely on Thursday’s policy decision by the U.S. Federal Reserve, which is expected to leave benchmark rates unchanged at 0.25 percent and potentially unveil fresh steps to encourage economic growth.

“Gold should continue fluctuating just below current highs, still trading against the U.S. currency,” Andrey Kryuchenkov, an analyst at VTB Capital, said.

“Our target levels are unchanged and we still have tentative resistance near $1,740; our key short-term resistance is at $1,750. On the downside, the market is supported at $1,690 and the current short-term uptrend,” he said.

Palladium rose 1.2 percent on the day to $673.72 an ounce, its highest since early May, while silver rose 1.1 percent to $33.85 an ounce