* Gold up after brief dip on Wednesday below $800
* Indian, Mideast physical buyers seen stepping in
* Dollar firms against euro after comments from ECB's Trichet
(Updates throughout)
By David Sheppard
LONDON, Sept 4 (Reuters) - Gold rebounded on Thursday,
rising almost 2 percent to move back above $800 an ounce on
physical buying.
Gold <XAU=> rose to a high of $814.70 an ounce before easing
slightly to trade at $804.40/805.60 at 1411 GMT from
$800.05/801.65 an ounce late in New York on Wednesday.
Bargain hunting has boosted prices after the metal slipped
close to its lowest level in nine months on Wednesday.
However, gains were capped as the dollar resumed its upward
trend against the euro after European Central Bank President
Jean-Claude Trichet said on Wednesday that the euro zone was in
a period of weak economic activity. []
The dollar's recent rally has reduced gold's appeal as a
hedge against weakness in the U.S currency, while the dollar's
strength has weighed across dollar-denominated commodities,
lessening inflation fears.
"Physical demand is holding up well, if not quite at the
very strong levels we've been seeing lately -- but it's still
historically strong," said UBS analyst John Reade
"The speculative market is a bit sold-out at the moment so
the dollar's strength this afternoon is perhaps having less
impact than it normally would."
UBS is one of the largest gold dealers and the investment
bank said it had seen its strongest physical sales in the past
20 years over the last two weeks.
EID AL-FITRI
International dealers saw purchases from jewellers in
Indonesia ahead of the Eid al-Fitri Muslim holidays in October
and safe-haven buying from Thailand, where Prime Minister Samak
Sundaravej refused despite street campaigns against him.
[]
Demand from India, the world's largest consumer, and also
the Middle East have helped to stem gold's decline from above
$980 an ounce back in mid-July.
However, there are concerns that strong demand during August
from key market Turkey may falter due to volatile prices and the
end of the wedding season. []
Platinum pared early losses, which saw the metal slip to a
two-week low in Asian trade, to rally by over 2 percent as
gold's moved higher helped to move the metal off its lows.
Spot platinum <XPT=> hit an intraday low of $1,318 an ounce,
down from $1,377.50/1,397.50 late in New York on Wednesday,
before rebounding to trade at $1,401.50/$1,421.50 an ounce.
Platinum has fallen by almost 40 percent since touching a
record high of $2,290 an ounce back in March.
Concerns over falling car sales in the U.S. and Europe have
dented sentiment, but some automakers may be looking to buy at
these lower levels, analysts said.
Autocatalysts, used to clean exhaust fumes, account for more
than half of global platinum use.
Platinum's sister metal palladium <XPD=> rose to
$286.00/294.00 an ounce from 282.50/290.50, while silver <XAG>
was steady at $12.88/12.94 an ounce from $12.84/12.97 an ounce.
(Reporting by David Sheppard; editing by Christopher
Johnson)
