* Investors worry about U.S. bailout plan
* Central bank gold pact ends 4th year
* Platinum down nearly 4 pct on weak demand outlook
(Recasts, updates prices, market activity to close; second
byline, dateline, previously LONDON)
By Frank Tang and Humeyra Pamuk
NEW YORK/LONDON, Sept 26 (Reuters) - Gold ended 1 percent
higher on Friday after surging as much as 4 percent during the
session, as safe-haven and technical buying gave way to
profit-taking ahead of the weekend.
Platinum tumbled almost 4 percent, dragged down by poor
demand outlook.
Spot gold <XAU=> was at $884.40/887.40 an ounce at 3:11
p.m. EDT (1911 GMT), up 1 percent from gold's nominal Thursday
close at $875.70. Earlier, it fell as low as $866.20 an ounce.
Pressure mounted on U.S. lawmakers to agree on the $700
billion bailout plan for the financial sector after talks at
the White House broke down in acrimony. European shares lost
ground and U.S. markets opened lower due to uncertainty.
President George W. Bush said there were disagreements on
parts of the plan, but Congress ultimately would pass
legislation. []
"We're waiting for the rescue package. There is uncertainty
about when it is coming," said analyst Barbara Lambrecht at
Commerzbank in Germany. "The chances of further bad news, new
financial crisis breaking out are all supportive for gold."
Flight-to-quality demand picked up for gold after U.S.
authorities shut bank Washington Mutual Inc on Thursday,
selling its assets to JPMorgan Chase & Co <JPM.N>.
[]
Fortis <FOR.BR> <FOR.AS> shares fell on Friday for a fifth
straight day in feverish trading. The Belgian-Dutch bank denied
it had liquidity problems, saying it had a funding base of 300
billion euros and solid solvency ratios.
"The gold market will continue to be well supported," said
Frank McGhee, head precious metals trader of Integrated
Brokerage Services, citing the "hyper-inflationary" effects of
the U.S. market bailout plan and the weak dollar.
U.S. gold contract for December delivery <GCZ8> settled up
$6.50 at $888.50 an ounce on the COMEX division of the New York
Mercantile Exchange.
Gold has gained about 20 percent since Sept. 11 as
safe-haven demand heightened after the collapse in the share
price of Lehman Brothers <LEHMQ.PK> raised questions about the
stability of the U.S. and global financial sector.
"Everything's just marking time, " said Simon Weeks,
managing director of precious metals at the Bank of Nova
Scotia. "People are waiting to see whether the U.S. lawmakers
will reach any conclusions," he said.
CENTRAL BANK GOLD AGREEMENT
Traders also will wait to hear how much gold has been sold
so far by the European central banks as Friday marks the end of
the fourth year of the Central Bank Gold Agreement.
In March 2004, 15 European central banks renewed a 1999
pact to limit their sales over a five-year period to 2,500
tonnes, with annual sales limited to 500 tonnes, up from 2,000
tonnes in the first agreement.
Platinum <XPT=>, widely used as a component in automotive
catalytic converters, dropped 3.6 percent after data Thursday
showed global output at Toyota, the largest automaker in Japan,
declined by 17 percent in August.
"The data suggests the demand from the autocatalyst sector
-- the major use for platinum and palladium -- is going to be
very, very soft," Briggs at RBS said.
The metal fell as low as $1,127.50 an ounce and was last at
$1,108.00/1,128.00 an ounce, down from the nominal close on
Thursday of $1,172.50.
Spot silver <XAG=> was at $13.37/13.47 an ounce, up 1.6
percent from Thursday's nominal close of $13.16, while spot
palladium <XPD=> was at $221.50/229.50 versus the Thursday
nominal close of $234.
