* Gold slips 1 pct ahead of U.S. $700 billion bailout vote
* Platinum down nearly 3 pct on demand worries
(Updates prices, adds activity in physical sector)
By Lewa Pardomuan
SINGAPORE, Sept 29 (Reuters) - Gold slipped more than 1
percent on Monday as U.S. lawmakers closed in on creating a
$700 billion government fund to buy bad debt, with investors
also keen to book profits from last week's rally.
U.S. lawmakers readied for a vote on creating the fund to
alleviate the financial crisis while European authorities raced
to the rescue of three troubled banks. "I suspect it will
weigh down on gold a little bit, but there will be further
selling as risk aversion eases," said Darren Heathcote of
Investec Australia in Sydney.
Spot gold traded at $876.75 an ounce, down $6.50 or 0.74
percent from New York's notional close on Friday, when it
jumped to its highest in nearly 7 weeks at $911.15, due to
uncertainties in the bailout plan.
It hit an intraday low of $868.85 on Monday -- down 1.6
percent from New York's close.
"I think we're rangebound between $860 and probably about
$920 at the moment. We're going to find some support by
physical buyers," said Heathcote, referring to levels last seen
in late September and late July.
Gold has bounced more than 18 percent since tumbling to
$736 on Sept 11, its weakest in nearly a year. It also
benefited from a wave of risk aversion after U.S. investment
bank Lehman Brothers filed for bankruptcy.
"Investors are still looking around trying to decide which
market provides the best investment," said Koji Suzuki, senior
analyst at SBI Futures Co Ltd.
"The market is likely to stabilise as more detailed news of
the deal becomes available," he said.
The physical sector was mostly deserted, with many dealers
in Indonesia and Malaysia already away to celebrate the Eid
al-Fitr Muslim holiday this week. Gold bars were quoted at a
premium of $1 against spot London prices, unchanged from last
week.
"I still receive some scraps but I guess people are
watching the financial situation in Europe and the U.S. bailout
plan, which is not actually confirmed," said a dealer in
Singapore. Bullion holdings of SPDR Gold Trust, the
world's largest gold-backed exchange-traded fund, remained near
a record at 724.63 tonnes. NYS-
The euro fell to $1.4499 on growing concerns about the
financial system.
In industry news, the chief of metals consultants GFMS
said gold should surge above $1,000 an ounce as the financial
crisis fuels safe-haven fund buying, but may then come under
pressure as fickle investors slow purchases.
Gold struck a record of $1,030.80 in March.
Platinum extended losses and fell as much as 2.8 percent
as poor car sales sparked demand worries. Spot platinum traded
at $1,087.50 an ounce, down $20.50 or 1.85 percent, having
hitting a low of $1,076 an ounce.
Japan's Toyota Motor Corp has started to reduce production
at a plant in China, the world's second-largest auto market,
the Nikkei business daily said on Sunday. Gold futures for
December delivery on the COMEX division of the New York
Mercantile Exchange fell $5.4 an ounce to $883.1 an ounce.
Precious metals prices at 0350 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 876.75 -6.50 -0.74 5.29
Spot Silver 13.19 -0.20 -1.49 -10.70
Spot Platinum 1087.50 -20.50 -1.85 -28.45
Spot Palladium 218.50 -2.50 -1.13 -40.63
TOCOM Gold 3001.00 38.00 +1.28 -1.93
15677
TOCOM Platinum 3728.00 -78.00 -2.05 -30.17
8043
TOCOM Silver 454.00 11.50 +2.60 -16.08
545
TOCOM Palladium 778.00 -35.00 -4.31 -42.41
385
Euro/Dollar 1.4510
Dollar/Yen 106.44
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 Miho Yoshikawa and Sydney bureau)
(Editing by Clarence Fernandez)
