* U.S. equities open sharply higher after Friday's sell-off
* Oil, base metals, other commodities regain lost ground
* Cenbanks, governments act to boost liquidity
(Updates throughout, adds detail, comment)
By Jan Harvey
LONDON, Oct 13 (Reuters) - Gold prices tumbled on Monday as
traders unsettled by the metal's failure to break resistance at
$930 an ounce sold the precious metal as stock markets
recovered.
Gold had risen 2 percent in earlier trade as the dollar
weakened, boosting the precious metal's appeal as an alternative
investment, and as prices of oil and other commodities climbed.
But it failed to hold those gains.
Spot gold <XAU=> fell 3 percent to a session low of $821.00,
and was quoted at $827.75/831.75 an ounce at 1428 GMT, down from
$847.40 in late New York trade on Friday.
The metal swung in a wide range on Friday as turmoil on
financial markets spooked investors. In New York trade, gold
fell as much as $88 an ounce from the previous session's close,
its biggest ever one-day fall in absolute terms.
"After the move we saw on Friday, the market needs to settle
and find some kind of floor," said Afshin Nabavi, head of
trading of MKS Finance.
"Gold rallied up to $930 an ounce, and failed," he added.
"That is leading to a bit of caution."
Analysts will be watching developments on other financial
markets closely, both for their influence on the dollar and on
demand for gold as a haven from risk.
Wall Street opened sharply higher on Monday, as a push by
governments around the world to pump money into the banking
system sparked relief among investors, and credit markets showed
signs of loosening up. []
European shares meanwhile rose more than 7 percent as
investors cheered bold plans by global governments and central
banks to stabilise the financial markets. []
European governments agreed to provide capital for banks
short of funds due to frozen money markets at an emergency
meeting in Paris over the weekend. Asian and Australasian banks
earlier announced calming moves of their own. []
Gold is taking support from a slip in the dollar versus the
euro, usually a key external driver of bullion prices. The euro
rallied broadly after European governments said they would work
together to stabilise the banking sector. []
EXTERNAL DRIVERS
If the markets settle, gold is expected to revert to
following its usual external drivers, the dollar and oil.
"If stock markets calm down and the fear index declines,
then gold is likely to follow again the usual fundamental
drivers," said Dresdner Kleinwort in a note.
Crude futures supported gold on Monday, rising more than $3
after Friday's more than 10 percent dive. []
Traders will also be eyeing investment interest in gold
exchange-traded funds. The world's largest gold-backed ETF, the
SPDR Gold Trust, said its holdings rose to a record 770.64
tonnes on Friday.
The UK's ETF Securities also said the amount of metal it
held to back its gold and silver exchange-traded commodities,
though holdings of its platinum and palladium-backed ETCs
declined. []
Silver <XAG=> climbed more than 5 percent to a session high
of $10.81 an ounce, up from $10.14 in late New York trade on
Friday. Later it was trading at $10.45/10.53.
More settled financial markets were expected to support the
industrial precious metals -- including silver, platinum and
palladium -- much more than gold.
Palladium <XPD=> climbed more than 5 percent to a high of
$199.50 an ounce, before settling back to trade at $197/199 an
ounce against $188.
Platinum languished, however, on fears demand from carmakers
will be lacklustre this year and into next year. Spot platinum
<XPT=> was at $971.50/995.50 an ounce against $980.50.
(Reporting by Jan Harvey; editing by Christopher Johnson)
