* Oil rally, dollar fall and strong commodities lift gold
* Investors watching dollar ahead of U.S. election
* Interest rate cuts make gold more attractive
(Recasts, updates with quotes, closing prices, market
activity, adds NEW YORK to dateline)
By Frank Tang and Julie Crust
NEW YORK/LONDON, Nov 4 (Reuters) - Gold rose 5 percent on
Tuesday as investors ditched the dollar and moved to
commodities and stocks, relieved that the U.S. presidential
election would end the uncertainty of the long campaign.
"A recovery of oil prices due to the Saudi (output) cut, a
more optimistic equity outlook and easier credit have certainly
triggered demand for gold," said James Steel, chief commodity
analyst of HSBC.
Spot gold <XAU=> was at $756.80 at 2:51 p.m. EST (1951
GMT), 4.8 percent higher than Monday's close of $722.35.
U.S. futures for December delivery <GCZ8> settled up
$30.50, or 4.2 percent, at $757.30 an ounce on the COMEX
division of the New York Mercantile Exchange.
Benchmark light sweet crude oil futures <CLc1> settled more
than 10 percent higher at over $70 per barrel on signs that
Saudi Arabia had made substantial cuts in crude exports and
stronger financial markets. []
Bullion was also supported by signs that a global recession
seemed averted for the moment. U.S. stocks were 3 percent
higher in afternoon trade.
The dollar endured its biggest one-day drop against a
basket of currencies in 13 years with investors betting global
interest rate cuts, which typically would boost the U.S.
currency, will stimulate growth and alleviate the global
financial crisis. []
A win by Democrat Barack Obama, who leads Republican John
McCain in most polls, would be marginally better for the dollar
in the longer term, analysts said.
"The U.S. election might have an impact on the euro/dollar
and so indirectly would have an impact on gold as well," said
Eugen Weinberg, an analyst at Commerzbank.
Expectations of further interest rate cuts this week by
major central banks also boosted gold. []
Gold has bounced more than 7 percent since falling to a
13-month low at $680.80 in late October, when investors cashed
in bullion to pay losses in stock markets. The metal was still
below a two-month high of $931 also hit last month as it
struggled to revisit a record high of $1,030.80 in March.
Physical demand for gold was slow as price volatility
turned away jewelers. Gold imports to India, the world's
biggest bullion market, fell 27 percent in October from a year
earlier, the Bombay Bullion Association said. []
Platinum <XPT=> fetched $841 an ounce, higher than New
York's Monday close of $810.
Platinum has lost more than half its value in the last
quarter on slow auto sales data and the outlook for demand from
carmakers, who consume more than half of annual platinum output
to make catalysts to clean exhaust fumes.
U.S. auto sales plunged 32 percent in October to lows
unseen in a quarter-century. [].
Lonmin Plc <LMI.L>, the world's No. 3 platinum producer,
advised trade unions of possible lay offs due to a big drop in
demand for the metal from car makers, South Africa's Solidarity
union said. []
Palladium <XPD=> was at $204.50 from Monday's close of
$195.50.
Silver <XAG=> closed at $9.95 from its previous finish of
$9.78.
