* Dollar slides to six-week low versus the euro
* Oil prices climb more than 4 percent
* Traders eye $14 billion rescue plan for U.S. carmakers
(Updates prices, adds detail, comment)
By Jan Harvey
LONDON, Dec 11 (Reuters) - Gold extended gains to rise
nearly 3 percent on Thursday as the dollar lost ground against
the euro, boosting the precious metal's appeal as a currency
hedge.
Gold and platinum prices traded at within $5 of one another,
threatening to breach parity for the first time in 12 years, as
platinum remained rangebound ahead of a decision on a $14
billion plan to bail out U.S. carmakers. []
Platinum, which is mainly used as a component in catalytic
converters, is particularly vulnerable to a downturn in the auto
sector.
Spot gold <XAU=> hit a high of $832.30 an ounce and was
quoted at $830.80/832.80 an ounce at 1304 GMT, up from $809.90
in New York late on Wednesday. Spot platinum <XPT=> was at
$837.50/857.50 an ounce against $822.
U.S. gold futures for February delivery <GCG9> rose more
than 3 percent to a high of $834.90 an ounce, and were later
quoted at $833.00, up $24.20.
"The spread between gold and platinum has now shrunk," said
Pradeep Unni, a senior analyst at Richcomm Global Services.
"This directly signals the current economic crisis and the
downturn in auto-sector industry."
"If the auto market bailout goes through, the spreads may
widen again," he added. "Gold meanwhile is recovering with the
euro's gain."
The precious metal is often bought as an alternative asset
to the dollar and tends to move in the opposite direction to it.
The U.S. currency 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 more than 4 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," Standard Bank analyst Manqoba
Madinane said.
SHARES SLIP
However, soft equity markets may keep a lid on gold's gains.
European shares were lower 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.
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 palladium <XPD=> was at $181/189 an ounce against
$177.50. Among other precious metals, spot silver <XAG=> rose to
$10.45/10.53 an ounce from $10.21.
(Reporting by Jan Harvey; editing by Sue Thomas)
