* Gold fights to hold above $800, dollar weighs
* Robust physical demand, support level caps downside
* Platinum extends losses on weak demand
* Oil falls to new 5-month low
(Recasts, updates prices and comments, pvs SINGAPORE)
By Humeyra Pamuk
LONDON, Sept 9 (Reuters) - Gold came under pressure on
Tuesday, struggling to stay above $800 an ounce level due to a
strong dollar, but robust physical demand capped losses.
Platinum dropped more than 4 percent on worries about demand
for autocalysts due to poor car sales in key markets such as the
United States, Japan and China, dragging sister metal palladium
down 6.5 percent.
Gold <XAU=> fell as low as 1 percent to $794.00 an ounce and
was at $799.80/800.80 an ounce by 0954 GMT, down from
$802.25/803.60 an ounce late in New York on Monday.
"The dollar rose from around 1.4300 to around 1.4100
(against the euro) yesterday and is definitely not bullish for
gold," said analyst Michael Widmer at Lehman Brothers.
The dollar hit a one-year high versus a basket of
currencies, while the yen surged broadly on a flight to safety
as investors concluded U.S. action to save two top mortgage
agencies did not alter fundamentals.
"There is some physical buying coming through and helping
the prices to hold onto those levels," Widmer said.
Bullion has fallen more than 18 percent since hitting a
four-month high of $987.75 an ounce in mid-July but stabilised
around $800 an ounce -- still up 14 percent from a year ago.
Gold was well below a lifetime high of $1,030.80 hit in
March and within sight of a nine-month low of $773.90 struck in
mid-August. Festive demand especially from main consumer India
was likely to offer support at lower levels, dealers said.
"We are approaching the Indian wedding season which is a
period of strong physical demand," said John Meyer at Fairfax
Investment Bank in a research note.
PHYSICAL DEMAND
India is stepping up purchases during the festive season,
which peaks in October with Diwali, the Hindu festival of
lights. Dealers also saw purchases from jewellers in Indonesia
ahead of the Eid al-Fitri Muslim holidays in October.
"Demand from our regular customers such as India, Indonesia
and Thailand is still there. There's a shortage of physical bars
in this region, which also helps support premiums," said a
dealer in Singapore.
Investors also kept an eye on oil prices, which fell to a
new five-month low, pressured by a rise in the U.S. dollar and
expectations that OPEC will not cut output when it meets later
on Tuesday.
In industry news, exports of Italian jewellery are expected
to improve after an estimated 30 percent drop in volume in the
first half to post a full-year fall of about 10 percent, a
senior industry expert said on Tuesday.
Spot platinum <XPT=> fell almost 5 percent to $1,274.00 an
ounce and was last at $1,287.50/1,307.50 from $1,337.00/1,357.00
late in New York on Monday, when it tumbled nearly 4 percent.
"Demand is very bad. Automakers are not buying," said
Kazuhiko Saito of Interes Capital Management in Tokyo, adding
that cash platinum may trade below $1,200 by end-September,
referring to a level last seen in March 2007.
Autocatalysts, used to clean exhaust fumes, account for more
than 50 percent of global demand. China's passenger car sales
fell in August from a year earlier, the first monthly decline in
more than two years as a slowing economy and the Beijing
Olympics kept would-be car buyers from showrooms.
[]
Silver <XAG=> was at $12.02/12.08 from $12.05/12.11 while
palladium <XPD=> at $248.50/256.50 from $258.00/266.00
(Additional reporting by Lew Pardomuan, Editing by Peter
Blackburn)
