* Gold rises for third day on firm euro, stock markets
* Nikkei rallies more than 7 percent
* Fed is seen easing rate by at least half a percentage
point
* Platinum down over 4 percent on demand worries
(Updates prices)
By Lewa Pardomuan
SINGAPORE, Oct 29 (Reuters) - Gold rose for a third
straight day on Wednesday, earlier jumping more than 1 percent
as the euro extended gains against the dollar and equities
bounced, spurring speculative buying ahead of a key U.S.
interest rate decision.
Wall Street was bracing for the Federal Reserve to unveil a
cut of between 50 and 75 basis points from the federal funds
interest rate, which stands at 1.5 percent. []
"You might think gold would benefit from safe haven
(buying) but on the other hand, the damage it might do to the
stock market could possibly mean we would get some gold selling
for margin calls again," said Darren Heathcote of Investec
Australia.
"It's a little bit difficult to predict at this stage. The
market is so very sensitive to the potential impact on growth
of any Fed movement," he added.
Gold <XAU=> traded at $747.35 an ounce, up $3.05 an ounce
from New York's notional close on Tuesday, when it also gained
more than 1 percent. It hit an intraday high of $754.65.
Gold tumbled to a 13-month low of $680.80 on Friday after
losses in equities markets drove investors to cash in bullion
to cover losses. It has lost more than 20 percent in value
since spiking to a record high of $1,030.80 in March.
"We are still in relatively weak territory, if you think
historically. We are not out of the woods yet, so to speak,"
said Heathcote. "The market would take some convincing that the
upward trend we've been seeing will continue and we'll get a
recovery in gold," he said.
The euro rose to $1.2740 <EUR=>, which in theory makes
dollar-priced gold cheaper for holders of other currencies.
[]
Asian stocks gave gold a shot in the arm, with the Nikkei
<> rallying 7.5 percent on hopes the Bank of Japan might
cut interest rates at a policy-setting meeting later this week.
[]
"Technically, gold seems to have found a temporary base
around the $700 support. However gains are likely to fade
soon," said analyst Pradeep Unni at Richcomm Global Services,
who expects selling to resume if gold regained $800.
"Key supports are at $720, $700 and $680 and resistance is
at $745, $766 and $786," he said. Gold last traded around $800
last week.
Platinum erased a 6 percent gain made on Tuesday as worries
about demand resufaced after U.S. Auto retailers swung to
quarterly losses in the third quarter due to weakening U.S.
economy and hurricane-relateddamages. []
Platinum was trading at $769.50 an ounce, down $39.50 from
New York's notional close on Tuesday, when it hit an intraday
high of $821.50.
New York gold futures <GCZ8> rose $10.5 an ounce to
$751.0.
Precious metals prices at 0159 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 747.35 3.05 +0.41 -10.25
Spot Silver 9.20 0.04 +0.44 -37.71
Spot Platinum 769.50 -39.50 -4.88 -49.38
Spot Palladium 180.00 4.00 +2.27 -51.09
Euro/Dollar 1.2716
Dollar/Yen 97.15
(Editing by Ben Tan)
