* Gold hits weakest in almost 2-weeks on weak oil, shares
* Nikkei drops 6 pcton worries over global economic
downturn
* The euro edges up against the dollar
(Updates prices)
By Lewa Pardomuan
SINGAPORE, Dec 2 (Reuters) - Gold slipped to its weakest in
almost two weeks on Tuesday as oil extended losses and equities
tumbled after a report confirmed the U.S. economy was in its
third-longest recession since the Great Depression.
Gold posted its biggest daily percentage fall in nearly
eight weeks on Monday as fears of severe recession reduced
investors' appetite for risky assets and the Reuters/Jefferies
CRB <.CRB> index, a global commodities benchmark, tumbled more
than 3 percent.
Gold <XAU=> was trading at $768.10 an ounce, down $2.50
from New York's notional close. It had dropped to a near
two-week low of $762.55 in early trade on Tuesday, then
rebounded on bargain hunting and a firmer euro before slipping
back again.
"We did see buying from jewellers as well as investors in
Japan and other parts of Asia but they are selling back. I
think the whole picture is still uncertain," said a dealer in
Hong Kong.
"People are confused. Sentiment can change on a daily
basis."
Oil <CLc1> struck a 3-1/2-year trough below $48 a barrel
after OPEC's decision to delay any further output cut until
mid-December, which in theory reduced gold's appeal as a hedge
against inflation. []
The MSCI index of Asia-Pacific stocks outside Japan
<.MIAPJ0000PUS> dropped about 4.5 percent, taking this year's
losses to nearly 60 percent, while Japan's Nikkei <>
tumbled more than 6 percent, after Monday's sell-down on a dour
global economic outlook. []
The euro edged up to $1.2624 <EUR=> after falling in New
York. []
Gold has regained some strength since hitting a 13-month
low of $680.80 in October, but dealers said it was hard to tell
whether an increase in net long positions in New York was a
sign of an improving sentiment.
Gold was still well below a record of $1,030.80 in March.
"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.
"But do remember that this is for the week November 25, so
it's a couple of days delayed," he said.
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
RELENTLESS BAD NEWS
In a sign of how drastically economic worries are crimping
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. []
Adding to the gloom, the U.S. economy was confirmed to have
fallen into a recession nearly a year ago and Federal Reserve
Chairman Ben Bernanke said the central bank is mulling extreme
policy measures such as buying government bonds to revive
growth. []
Global central banks are slashing rates and unveiling new
steps to unclog credit markets and contain the economic damage
from the 15-month crisis. The Reserve Bank of Australia chopped
rates by a full percentage point to 4.25 percent on Tuesday, a
6-1/2-year low. []
Platinum bounced after posting its daily percentage drop
since mid-September on Monday and dealers expected selling in
Tokyo to slow down due to narrowing spread between the white
metal and gold. 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.
Platinum <XPT=> was trading at $797.50 an ounce, up $7.00
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 $8.3 an ounce to $768.7
in electronic trade.
Precious metals prices at 0714 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 768.10 -2.50 -0.32 -7.76
Spot Silver 9.29 0.03 +0.32 -37.10
Spot Platinum 797.50 7.00 +0.89 -47.53
Spot Palladium 172.50 1.00 +0.58 -53.13
TOCOM Gold 2290.00 -140.00 -5.76 -25.16
60205
TOCOM Platinum 2397.00 -85.00 -3.42 -55.10
21150
TOCOM Silver 275.50 -25.90 -8.59 -49.08
754
TOCOM Palladium 533.00 -37.00 -6.49 -60.55
550
Euro/Dollar 1.2616
Dollar/Yen 93.18
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)
