* Gold gives up early gains as shares jump
* Nikkei rises more than 1 pct on hopes for U.S. rescue
plan
(Updates prices, adds activity in physical market)
By Lewa Pardomuan
SINGAPORE , Sept 22 (Reuters) - Gold dropped more than 1
percent on Monday, losing some of its appeal as an alternative
investment after share prices jumped on hopes for wide-ranging
U.S. government measures to rescue the financial system.
In the physical sector, investors across Asia sold back
their bullion for cash after prices briefly jumped to $900 an
ounce as fears of financial stability in the United States
spurred speculative buying. []
Spot gold <XAU=> was trading at $869.70 an ounce, down
$2.50 or $0.29 percent from New York's notional close on
Friday, having hit an intraday low of $861.40 an ounce.
"I guess we may see some buying if the market stabilises,
and it looks like gold will move within the recent trading
range of $850 to $900," said a dealer in Hong Kong.
Goldman Sachs and Morgan Stanley gave up their cherished
investment banking status in return for cover under the Fed's
wing to survive a financial storm that U.S. authorities aim to
ride out with a $700 billion bailout plan. []
"I think everyone is still going to focus on what the U.S.
is going to do about the financial turmoil. The markets should
be focusing more on the equity markets after the strong rebound
in the U.S. equity markets," said Adrian Koh, analyst at
Phillip Futures in Singapore.
"Gold will probably consolidate around these regions for a
while after the huge move last week. For the near-term, the
$900-$905 regions will provide resistance to further upside
while the $845 regions provide strong support," he said.
The Nikkei average <> rose to a one-week high on
Monday on hopes for the bank bailout proposed by the United
States over the weekend to tackle the financial crisis.
[]
Gold rallied to a six-week high above $900 on Thursday due
to fears the financial crisis had not yet run its course, and
bullion also benefited from a wave of risk aversion after U.S.
investment bank Lehman Brothers filed for bankruptcy.
Profit taking erased some of the gains and gold was below a
record high of $1,030.80 hit in March.
Hopes the U.S. rescue plan would restore stability in the
financial market also helped oil <CLc1> extend last week's
rally. []. In theory, high oil prices lift gold's appeal as
a hedge against inflation.
COMEX gold futures advanced after settling down nearly 4
percent on Friday. The most active December contract <GCZ8> was
trading up 1.13 percent at $874.50 from the New York
settlement.
Platinum <XPT=> was trading at $1,167 per ounce, up $32.50
or 2.86 percent from Friday's notional close.
"I think platinum and palladium remains rather weighed
cause I think they are more tied to the financial turmoil and
slowing demands," said Koh of Phillip Futures.
Platinum tumbled to a 2-1/2-year low at $1,042 an ounce
last week as slowing U.S. economy and poor car sales forced
automakers to slash their production plans. Platinum is mainly
used in autocatalysts.
Precious metals prices at 0714 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 869.70 -2.50 -0.29 4.44
Spot Silver 12.60 0.05 +0.40 -14.69
Spot Platinum 1167.00 32.50 +2.86 -23.22
Spot Palladium 239.00 8.00 +3.46 -35.05
TOCOM Gold 2964.00 118.00 +4.15 -3.14
45115
TOCOM Platinum 3945.00 300.00 +8.23 -26.11
15753
TOCOM Silver 435.40 26.20 +6.40 -19.52
754
TOCOM Palladium 845.00 61.00 +7.78 -37.45
560
Euro/Dollar 1.4499
Dollar/Yen 106.38
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Additional reporting by Chikafumi Hodo in Tokyo)
(Editing by Clarence Fernandez)
