* Dollar sinks on weak U.S. retail sales, market fears
* Traders brace potentially catastrophic Hurricane Ike
(Recasts, updates with closing prices, market activity, adds
NEW YORK to dateline)
By Frank Tang and Jan Harvey
NEW YORK/LONDON, Sept 12 (Reuters) - Gold ended sharply
higher on Friday, as the dollar fell on weak U.S. retail sales
data and as Hurricane Ike, a potential catastrophe, moved
toward the southwestern United States.
Other precious metals bounced back after Thursday's sharp
losses, with platinum rising nearly 5 percent, palladium
gaining 6 percent and silver ticking up almost 3 percent.
Spot gold <XAU=> was at $765.75/767.75 an ounce late by New
York's last quote. Earlier it rallied to a session high of
$765.75.
U.S. gold futures for December delivery <GCZ8> settled up
$19.00, or 2.6 percent, at $764.50 an ounce on the COMEX
division of the New York Mercantile Exchange.
The dollar fell on profit-taking triggered by uncertainty
over the future of troubled investment bank Lehman Brothers and
data showing a second straight month of retail sales declines.
Gold, often bought as a currency hedge, typically moves
opposite the dollar. The precious metal also is being helped by
fears that oil prices could jump if Hurricane Ike disrupts U.S.
production. []
U.S. crude futures <CLc1> ended up 31 cents higher at
$101.18 per barrel.
Hurricane Ike closed in on the Texas coast on Friday with a
wall of water. U.S. officials warned it could be a catastrophic
storm and flood 100,000 homes. []
Gold often rises in times of natural disaster or financial
turmoil because of its safe haven attribute.
DOWNWARD RISK
Although the dollar fell on Friday, the U.S. currency is
expected to trend higher, so analysts remained cautious over
the outlook for gold.
"There is some support around the $750 level. However, I
see no evidence that the downtrend in the gold market has come
to an end," Saxo Bank's Carlsson said. "The outlook for a
stronger U.S. dollar will keep the pressure going."
Traders said they have seen firm demand for gold coins,
bars and jewelry, but changing expectations for gold's price
outlook are affecting buying.
"Physical demand increased again around the $750 levels,
but a lot of customers expect a bigger (price) drop in the
future," senior Commerzbank trader Michael Kempinski said.
"Some customers are looking for $700."
Among other precious metals, platinum and palladium both
bounced up after recent losses, as analysts suggested the
metals may have been oversold.
Platinum has dropped 14 percent since last Friday, and is
more than 50 percent below the all-time high of $2,290 an ounce
it hit in March.
Palladium has shed 9 percent since last Friday, and touched
a near three-year low of $212 on Thursday.
Spot platinum <XPT=> was last at $1,204.00/1,224.00, up
from $1,126.50/1,146.50 late in New York on Thursday, having
earlier hit a session high of $1,182. Palladium <XPD=> finished
at $242.50/250.50 from its previous close of $226.50/234.50 on
Thursday.
Spot silver <XAG=> was at $10.83/10.93 against $10.43/10.51
last in the U.S. market on Thursday.
