* 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, adds quotes)
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. []
Gold <XAU=> traded at $747.90 an ounce, up $3.60 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, where
selling emerged to trim early gains.
"It's a bit slow but still there's some physical demand
from the investment side," said Dick Poon, manager of precious
metals at Heraeus Ltd in Hong Kong.
"Once the (global) market stabilises, I think there won't
be a problem for gold to rebound to $800," said Poon, referring
to a level last seen last week.
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.
"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," said Darren Heathcote of Investec
Australia.
"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,"
The euro rose to $1.2705 <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 more than 7 percent on hopes the Bank of Japan
might cut interest rates at a policy-setting meeting later this
week. []
"Failure to breach the key resistance at $755 is a kind of
negative signal which may pave the way for gold to head lower
to the recent support of $720 at theleast," said analyst
Pradeep Unni at Richcomm Global Services.
"Key supports are at $734, $720 and $709. Key Resistance is
at $755, $768 and $786. A quick spike to $780-$790 is only
possible if gold manages to hold above $755."
Platinum erased a 6 percent gain made on Tuesday as worries
about demand resurfaced 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 $767.50 an ounce, down $41.50 from
New York's notional close on Tuesday, when it hit an intraday
high of $821.50.
New York gold futures <GCZ8> rose $8.2 an ounce to $740.5.
Precious metals prices at 0620 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 747.90 3.60 +0.48 -10.18
Spot Silver 9.11 -0.05 -0.55 -38.32
Spot Platinum 767.50 -41.50 -5.13 -49.51
Spot Palladium 178.50 2.50 +1.42 -51.49
(Editing by Ben Tan)
