* Dollar slides to six-week low versus the euro
* Oil prices climb more than 3 percent
* Traders eye $14 billion rescue plan for U.S. carmakers
(Recasts, adds detail, changes dateline, pvs SINGAPORE)
By Jan Harvey
LONDON, Dec 11 (Reuters) - Gold extended gains by more than
1 percent on Thursday, tracking losses in the dollar, after
posting its biggest percentage climb in almost three weeks the
previous session.
Platinum and palladium also ticked higher but remained
rangebound as traders awaited the outcome of Congress'
discussions of a $14 billion plan to bail out U.S. carmakers.
Spot gold <XAU=> was quoted at $822.10/824.10 an ounce at
1017 GMT, up from $809.90 an ounce late in New York on
Wednesday, when the precious metal climbed 4 percent on rising
oil prices and dollar weakness.
"The main driver yesterday was the dollar, and this morning
it has weakened again. That is supporting gold," said BNP
Paribas analyst Michael Widmer. "You would expect gold prices to
perform well in an environment of a falling dollar."
The precious metal is often bought as an alternative asset
to the U.S. currency and tends to move in the opposite direction
to it.
The dollar hit a six-week low against the euro, as doubts
crept in over whether projected pent-up demand for the currency
would materialise over year-end. []
The other main external driver of gold, the oil price, was
also supportive, ticking up nearly 3 percent as signs emerged
that top exporter Saudi Arabia had slashed January supplies
ahead of next week's meeting of oil cartel OPEC. []
Crude also received a fillip from the International Energy
Agency's monthly report, which said it saw global demand growing
in 2009 and expected OPEC to cut supplies next month [].
Rising oil prices help support interest in commodities as an
asset class, and can boost gold's appeal as an inflation hedge.
"Precious metals may get further support today if such oil
price volatility is repeated," said Standard Bank analyst
Manqoba Madinane.
SHARES SLIP
However, soft equity markets may keep a lid on gold's gains.
European shares were lower in early trade as worries over
the health of the global economy weighed, and as investors
awaited the outcome of a $14 billion U.S. proposal to bail out
carmakers. []
The proposal passed the House of Representatives but is
likely to hit resistance in the Senate. []
Platinum and palladium traders in particular awaited the
outcome of the plan. Carmakers account for more than half of
annual global consumption of the metals, which are chiefly used
in the manufacture of catalytic converters.
Until more definite news on the bailout package emerges, the
metals are likely to remain rangebound, analysts said.
"With the final decision on the U.S. bailout packages now
unlikely till after the weekend it is more than likely platinum
will remain in the $780-882 range," noted James Moore, an
analyst at TheBullionDesk.com.
Spot platinum <XPT=> was quoted at $834.50/854.50 an ounce,
up from $822 an ounce late in New York on Wednesday. Palladium
<XPD=> was at $180/185 an ounce against $177.50.
Among other precious metals, spot silver <XAG=> rose to
$10.40/10.48 an ounce from $10.21.
(Reporting by Jan Harvey; editing by William Hardy)
