* Bargain hunting, firm euro pluck gold from 2-week low
* Oil falls below $49 and may cap gains
* Nikkei drops nearly 5 percent
(Updates prices, adds comment and graphic link)
By Lewa Pardomuan
SINGAPORE, Dec 2 (Reuters) - Gold reversed early losses on
Tuesday as bargain hunters resurfaced after bullion posted its
biggest daily percentage fall in almost eight weeks the
previous day, but weaker oil and equities are likely to cap
gains.
Platinum also bounced from a near two-week low and could
find support around the current levels, with dealers expecting
selling by speculators in Japan to subside because of the
narrowing spread between the white metal and gold.
Gold <XAU=> was trading at $773.95 an ounce, up $3.35 from
New York's notional close on Monday, when broad-based
commodities Reuters/Jefferies CRB <.CRB> indexalso tumbled more
than 3 percent, led by a 9 percent fall in crude oil.
Bullion hit an intraday low of $762.55, its weakest in
nearly two weeks, in early trade on Tuesday before bouncing to
track a firmer euro against the U.S. dollar.
"The increase in net long positions in New York could mean
some people are increasingly bullish on gold. I guess we will
now be looking at the $750 regions for support now," said a
dealer in Singapore, referring to the 25-day moving average.
"The crisis in Thailand may have some impact on gold but
it's going to be minimal. The focus seems to have shifted back
to the gobal economy again," he said.
But falling equities markets could still force investors to
sell bullion to cover losses amid signs of a deepening global
economic downturn, which could cut investors' appetite for
risky assets.
In a sign of how drastically the deepening economic gloom
was curbing demand, U.S. manufacturing in November fell to its
weakest in 26 years. A similar reading on euro zone factories
sank to a record low. And the National Bureau of Economic
Research, regarded as the arbiter of U.S. recessions, made
official the economy had sunk into recession as early as
December last year. [] []
Speculative gold players in the non-commercial category
boosted their net long positions to 81,872 on gold futures
traded on COMEX at Nov. 25, up from 64,829 long lots at Nov.
18, Commodity Futures Trading Commission data showed.
For speculative length in U.S. commodity markets, click:
https://customers.reuters.com/d/graphics/CMDS_CFTCNTLG08.gif
Gold has regained some strength since hitting a 13-month
low of $680.80 in October but was still well below a record of
$1,030.80 in March. The political crisis in Thailand could spur
safe-haven buying, although many jewellers were likely to stay
away from the market as the year-end approached.
A bomb blast killed an anti-government protester and
wounded 22 at Bangkok's blockaded Don Muang airport on Tuesday,
hours before the ruling in a vote fraud case that could deal a
crippling blow to the government. []
Oil <CLc1> extended fall and held near a 3-1/2-year low
after OPEC's decision to delay any further output cut until
mid-December. []
Japan's Nikkei average <> slid 5 percent on Tuesday,
while the euro edged up to $1.2624 <EUR=> after falling in New
York as weak economic data heightened fears about a deep
economic slowdown around the world. []
Other precious metals tracked gold higher. Platinum bounced
after posting its daily percentage drop since mid-September on
Monday and dealers expected selling in Tokyo to slow down.
Tokyo futures <0#JPL:> often set the tone for spot market.
"A sell-off in platinum futures due to global demand
concerns has come to a halt now that the prices were down to
the same level as gold futures, said Hitoshi Inagawa, senior
manager at Yutaka Shoji Co.
"People prefered selling auto-related commodities, namely
rubber, gasoline, platinum in the past several months. But
today could be a turning point as one of the reasons to sell
them aggressively is disappearing."
Platinum <XPT=> was trading at $814.00 an ounce, up $23.50
from New York notional close. The spread between platinum and
gold dropped to less than $50, from more than $1,000 in March,
when platinum also hit alifetime high of $2,290.
New York gold futures <GCZ9> fell $1.0 an ounce to $775.8
in electronic trade.
Precious metals prices at 0249 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 773.95 3.35 +0.43 -7.06
Spot Silver 9.36 0.10 +1.08 -36.63
Spot Platinum 814.00 23.50 +2.97 -46.45
Spot Palladium 173.00 1.50 +0.87 -52.99
TOCOM Gold 2328.00 -102.00 -4.20 -23.92
27299
TOCOM Platinum 2456.00 -26.00 -1.05 -54.00
11275
TOCOM Silver 280.00 -21.40 -7.10 -48.24
342
TOCOM Palladium 538.00 -32.00 -5.61 -60.18
323
Euro/Dollar 1.2640
Dollar/Yen 93.57
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 Risa Maeda in Tokyo; Editing by Ben
Tan)
