* Gold up as other commods jump, after AIG bailout plan
* Fed to lend up to $85 billion to AIG
* Platinum up more than 5 pct, but market still fragile
(Update prices to late afternoon)
By Chikafumi Hodo
TOKYO, Sept 17 (Reuters) - Gold climbed on Wednesday, in
tandem with other commodities, as the Federal Reserve's rescue
of troubled insurer American International Group (AIG) offered
a glimmer of hope for a break in the credit crisis.
Bullion was lifted by hopes that more stable financial
markets might help revive interest in beaten-down commodities
and by the dollar's fall against the euro, even though a 1
percent slump in the yen suggested limited demand for safer
havens like gold.
Other precious metals jumped broadly, with spot platinum
<XPT=> climbing more than 5 percent to as high as $1,110 per
ounce at one point after having dived nearly 10 percent the
previous day.
Spot gold <XAU=> rose 0.7 percent, or $5.15, to $782.70 an
ounce as of 0706 GMT from Tuesday's nominal close in New York,
recovering from the previous day's $3 fall as risk-averse
investors rushed to dump all commodities.
The U.S. Federal Reserve said in a statement it would
extend AIG <AIG.N> $85 billion in exchange for a nearly 80
percent stake to bail it out. []
The Fed's move helped ease fears about a financial system
crisis following the bankruptcy of Lehman Brothers <LEH.P>
earlier in the week, traders said.
Gold has been whipsawed in recent weeks by rapidly shifting
investor perception over whether it remains a safe-haven asset
or whether it is part of a riskier commodities pool.
"We can take AIG's news as a positive factor for gold,
although uncertainty still remains in the market," said Shuji
Sugata, a manager at Mitsubishi Corp Futures and Securities
Ltd.
"Uncertainty in the financial market could force investors
to cut risky positions, while at the same time, gold is gaining
safe-haven appeal. Trading will remain very volatile for a
while," Sugata said.
COMEX gold futures rose after falling in New York on
Tuesday. The most active December contract <GCZ8> was trading
$6.0 or 0.8 percent higher at $786.4 from the New York
settlement.
The benchmark August 2009 gold contract on the Tokyo
Commodity Exchange <0#JAU:> was 70 yen or 2.7 percent higher at
2,664 yen per gram from Tuesday.
Traders said there was more appetite from investors in Asia
and the Middle East to hold gold as a safe-haven instrument.
"There is especially strong interest from Asia and the
Middle East to hold gold. They have been seeking
bargain-hunting opportunities as uncertainties remain in
currencies, stocks and credit markets," said a senior trader at
a trading house.
Spot platinum jumped more than 5 percent on short covering,
offsetting a near 10 percent plunge the previous day.
But platinum drifted from highs on views that the latest
financial crisis in the United States could affect the global
economy to further depress demand for the white metal, mainly
used in autocatalysts, traders said.
Spot platinum <XPT=> was trading at $1,089/1,119 per ounce,
up 3.8 percent or $40 from Tuesday's nominal close in New York.
It struck a record high of $2,290 an ounce in March.
Platinum has been hit by heavy selling due to a slowing
U.S. economy and poor car sales. Demand for new cars in Europe
fell by 7.3 percent in July and 15.6 percent in August compared
with a year ago. Over the first eight months of the year, new
car registrations in Europe fell by 3.9 percent. []
"Precious metals are up, basically on a technical rebound,
but the market is still very nervous about buying strongly,"
said Hisaaki Tasaka, a market analyst at Ace Koeki Co Ltd.
"Platinum jumped but there are strong concerns about demand
for industrial metals and platinum. Gains in platinum are
likely to be limited."
Precious metals prices at 0706 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 782.70 5.15 +0.66 -6.00
Spot Silver 10.69 0.25 +2.39 -27.62
Spot Platinum 1088.00 39.00 +3.72 -28.42
Spot Palladium 224.00 3.00 +1.36 -39.13
TOCOM Gold 2664.00 70.00 +2.70 -12.94
39436
TOCOM Platinum 3698.00 -5.00 -0.14 -30.74
22714
TOCOM Silver 365.50 3.40 +0.94 -32.44
1060
TOCOM Palladium 788.00 18.00 +2.34 -41.67
785
Euro/Dollar 1.4227
Dollar/Yen 105.84
TOCOM prices in yen per gram, except for silver which is in
yen per 10 grams, spot prices in $ per ounce.
(Reporting by Chikafumi Hodo, Editing by Jacqueline Wong)
