* Euro weakens on rate cut expectations, weak PMIs
* Silver tumbles 10 percent after U.S. open
* Platinum, palladium slip 8 pct on demand fears
(Updates throughout, adds comment)
By Jan Harvey
LONDON, Dec 1 (Reuters) - Precious metals prices fell
across the board on Monday, with silver tumbling 10 percent, as
oil fell in the wake of OPEC's decision to defer a production
cut, and the dollar strengthened against the euro.
Gold slipped more than 4 percent to its weakest level since
Nov 21, while platinum and palladium tumbled 8 percent each as
investors fretted over the outlook for demand.
Spot gold <XAU=> hit a session low of $776.80 an ounce and
was quoted at $782.80/785.30 at 1445 GMT, down from $813.00 an
ounce late on Friday. Silver <XAG=> fell to a low of $9.15 and
was later trading at $9.35/9.43, down from $10.26 on Friday.
"Gold was already weaker this morning in Asia on falling oil
prices, and as crude oil accelerated its decline in European
trading and the start of trading in the US, gold came under
pressure," Dresdner Kleinwort consultant Peter Fertig said.
"Furthermore European PMIs came in weaker than expected...
so pressure on the euro increased and stock markets came under
heavy selling pressure, which is another negative factor for the
precious metals."
Oil prices fell more than 7 percent after OPEC opted to wait
until mid-December to cut output at a meeting in Egypt at the
weekend. []
Gold tends to move in line with crude because it is bought
as a hedge against oil-led inflation and weaker oil prices
undermine interest in commodities as an asset class.
The dollar, the other main external driver of gold, firmed
0.8 percent against the euro amid expectations of a half-point
rate cut from the European Central Bank on Thursday.
[]
Euro zone manufacturing activity fell to a record low in
November and the outlook remains grim, private sector data
showed. []
A spate of U.S. economic data due this week is likely to
affect currency markets and the precious metals.
"The prime focus would be on the U.S. non-farm payrolls on
Friday which is likely to fall negative for the 11th straight
month and by the most since September 2001," said Pradeep Unni,
a senior analyst at Richcomm Global Services.
PLATINUM TUMBLES
Platinum slipped nearly 8 percent as weak Japanese auto
sales data emphasised poor demand from carmakers.
Spot platinum slipped to a session low of $798.50 an ounce,
and was later trading at $804.50/824.50, against $871.50 an
ounce late on Friday. Sister metal palladium fell 8 percent to
$170.50/178.50 from $186.50.
Worries over falling car sales has already led platinum to
slump some 65 percent since it hit an all-time high of $2,290 an
ounce in March.
Weak Japanese car sales data on Monday spurred fresh
selling. Sales fell 27.3 percent in November from a year before,
the Japan Automobile Dealers Association said on Monday.
[]
Falling U.S. car sales were largely priced into the market,
but the same trend elsewhere could push prices down further,
traders said.
"The market is now reacting to uncertainty about how the
Chinese market will fare going forwards, and the fact that
Japanese automakers, who were regarded as best managed and
strongest financially, are clearly facing the same problems as
all the others," Tom Kendall, precious metals strategist at
Mitsubishi Corporation, said.
(Editing by Sue Thomas)
