* Gold returns early gains and more
* Equity rout in Asia take toll on gold
(Releads, adds details, comment, updates prices to afternoon)
SYDNEY, Oct 27 (Reuters) - Gold returned early gains and
then some on Monday, with equity markets plunging in Asia as
investors digested the latest series of government
interventions.
Gold popped up almost 2 percent early on as investors
scoured for safe havens amid fresh government efforts to calm
financial market turmoil, before retracing by more than $20 at
one point.
Spot gold <XAU=> was quoted at $727.60 an ounce at 0603 GMT
versus $731.50 on Friday.
Australia's central bank stepped into currency markets in
European trade on Friday to support the local currency, while
the U.S. was bracing for an interest rate cut later this week.
[]
In an emergency meeting, South Korea slashed its official
rate 75 basis points percent. []
"We're seeing some follow through interest in gold today
which has more to do with reaction to all the events going on
than the metal," said a bullion dealer in Sydney.
Merrill Lynch in a report cut its average gold price
forecast for 2008 by 2.7 percent to $885 an ounce. Gold sold
for a record $1,030.80 on March 17.
U.S. gold futures for December delivery <GCZ8> rose $7.20
to $737.50 an ounce, after falling below $700 last week.
The U.S. Federal Reserve is expected to cut lending rates
at a two-day policy meeting this week in response to
unprecedented turmoil in financial markets. The consensus among
Fed watchers is for a half-point cut in overnight rates to 1
percent. []
By early afternoon, gold showed little safe-harbour
resilience against further declines in stocks, as Australian,
Japanese and other Asian bourses tumbled.
However, Goldman Sachs JBWere said gold's reputation was
intact.
"We remain of the view that in the current global financial
turmoil, there will be a time when there is a flight to safety
of gold and an upward U.S. dollar gold price trajectory," it
said in a report.
Some gold mining stocks bucked the downtrend, with
Australia No. 1 and No. 2 miners, Newcrest Mining <NCM.AX>< and
Lihir Gold <LGL.AX>, each up 2.6 percent.
Oil -- hovering just above $64 a barrel after falling near
$4 in the previous session -- was sending mixed signals to
bullion markets, which normally turn to oil for a read on
inflationary pressures.
An overnight Lundberg survey showed the average retail
price for a gallon of gasoline in the United States plunged
more steeply than ever over the last two weeks as the economic
slowdown weighed on crude oil.
Spot platinum <XPT=> was quoted $802.00 an ounce versus
$787.50 in New York on Friday.
Spot palladium <XPD=> was up $1 to $166.00 an ounce.
Spot silver <XAG=> was fetching $9.25 an ounce versus $8.63
in New York on Friday. Silver continued to rebound after
dropping as much as 10 percent on Friday.
Precious metals prices at 0635GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 725.85 -6.55 -0.89 -12.83
Spot Silver 9.14 -0.26 -2.77 -38.12
Spot Platinum 778.00 -10.50 -1.33 -48.82
Spot Palladium 170.00 2.00 +1.19 -53.80
TOCOM Gold 2161.00 51.00 +2.42 -29.38
60834
TOCOM Platinum 2317.00 -25.00 -1.07 -56.60
14055
TOCOM Silver 267.40 0.90 +0.34 -50.57
789
TOCOM Palladium 517.00 -17.00 -3.18 -61.73
305
Euro/Dollar 1.2528
Dollar/Yen 93.28
(Reporting by James Regan; Editing by Michael Urquhart)
