* Dollar slides to six-week low versus the euro
* Gold trades above platinum for the first time since 1996
* Bullion hits record in sterling terms, says Reuters data
(Recasts after gold rises above platinum, updates prices)
By Jan Harvey
LONDON, Dec 11 (Reuters) - Gold extended gains to nearly 3
percent to rise above platinum for the first time in 12 years on
Thursday as the dollar lost ground against the euro, boosting
the precious metal's appeal as a currency hedge.
Traders kept a close eye on a $14 billion plan to bailout
U.S. carmakers as platinum, 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 $833.80 an ounce and was
around $828 an ounce when spot platinum <XPT=> fell below the
bullion to trade around $824-825 an ounce.
"There's going to be people playing this ratio between the
two from a trading point of view," precious metals strategist
Tom Kendall at Mitsubishi said.
The yellow metal was at $823.50 an ounce by 1622 GMT, versus
809.90 an ounce late in New York on Wednesday while platinum was
at $825/845 an ounce against $822.
"But in the big scheme of things I don't think there is much
overlap between the two in terms of their actual use and
physical demand," he said.
"We've seen euro fly up today and try and push through what
is quite a significant barrier around 1.3280 mark and fail and
that's what really been at the forefront of the market today
along with the move higher in oil."
"That's really what gave gold a lift," he said.
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. []
In sterling terms, gold rose to an all-time high of 559.18
pounds an ounce, according to Reuters data, up from 546.51
pounds an ounce late on Wednesday. The euro hit a record high
against sterling <EURGBP=>.
Gold is often bought as an alternative asset to the dollar
and tends to move in the opposite direction to it.
U.S. gold futures for February delivery <GCG9> rose more
than 3 percent to a high of $835.30 an ounce, and were later
quoted at $827.60, up $18.80.
The other main external driver of gold, the oil price, was
also supportive, ticking up above $46 a barrel as signs emerged
that top exporter Saudi Arabia was preparing to slash 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.
But the market remained jittery as it awaited to hear more
on 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 $175.50/183.50 an ounce against
$177.50. Among other precious metals, spot silver <XAG=> rose to
$10.38/10.46 an ounce from $10.21.
(Additional reporting by Humeyra Pamuk; editing by Peter
Blackburn, David Evans)
