* Dollar weakens against euro after early gains
* Commodities slip after U.S. carmaker rescue plan fails
* Traders await U.S. PPI, retails sales data for November
(Recasts, adds detail, changes dateline, pvs SINGAPORE)
By Jan Harvey
LONDON, Dec 12 (Reuters) - Gold lifted from lows on Friday
as the dollar softened against the euro, but stayed weaker after
news that a $14 billion plan to bail out ailing U.S. carmakers
has failed sparked selling of equities and commodities.
A firmer euro against the dollar was helping the precious
metal, analysts said. However, platinum and palladium, which
rely on carmakers for a large portion of demand for the metal,
remain weak.
Spot gold <XAU=> dipped to a low of $807.00 an ounce and was
quoted at $814.30/816.30 an ounce at 1008 GMT, down from $818.35
an ounce on Thursday.
"With the start of trading in Europe, the euro recovered and
is moving back towards the highs made early in Asian trading,"
Dresdner Kleinwort analyst Peter Fertig said. "This is giving
gold some support."
"Also, after the plunge in stock markets and crude oil,
there has been a bit of a rebound in the first hour of trading
in Europe. This is also supportive," he added.
Gold earlier slipped along with other commodities such as
oil and base metals after the failure of the plan to aid
carmakers. The U.S. House of Representatives had agreed to the
bailout but the plan could not get through the Senate.
The bailout's failure, for this year at least, raised fears
of an industry collapse that could threaten countless jobs, with
uncertainty filtering through to the financial markets, sending
investors fleeing from risky assets. []
"Everything is lower overnight, the platinum group metals in
particular, on the news that the Senate had thrown out the car
company bill," Commerzbank trader Rory McVeigh said.
COPPER, NICKEL SLIDE
Oil prices fell by more than 4 percent after the news, and
industrial metals tumbled, with copper and nickel prices sliding
by more than 5 percent each. []
Equity markets also fell in Asia and slumped in early
European trade. The FTSE 100 <> fell 3.4 percent, German's
DAX <> slipped 3.9 percent, and France's CAC 40 was down
4.3 percent. []
Falling equities may continue to pressure gold, which can be
sold to raise liquidity to cover losses on other markets,
analysts say.
"The panic that could set into equity markets might see
demand for U.S. Treasuries rise, and therefore some dollar
appreciation," Standard Bank analyst Walter de Wet said.
A firmer dollar tends to weigh on gold, which is often
bought as an alternative investment to the U.S. currency.
The dollar firmed against the euro in early European trade,
despite hitting a 13-year low against the yen as the failure of
the U.S. carmaker bailout sent investors scurrying to the
perceived safety of the Japanese currency. []
But it later slipped against the euro, supporting gold.
Platinum fell nearly 3 percent and palladium lost just under
4 as traders worried about the outlook for demand from
carmakers, who consume about half of global supply of the two
metals each year.
Troubles in the automotive sector have already knocked
platinum and palladium down some 65 percent and 70 percent
respectively from this year's highs reached in March.
Spot platinum <XPT=> fell to a session low of $797.50 an
ounce, and was later at $809/829 an ounce against $826.
Palladium <XPD=> was at $170/178 an ounce against $177.
Spot silver <XAG=> was at $10.15/10.23 an ounce, down from
$10.30.
(Editing by Sue Thomas)
