* European, U.S. equities slip on credit crisis fears
* Bundesbank says no plans to sell more gold in next 12 mths
* Gold climbs nearly 5 pct to day highs in euro terms
(Recasts, updates prices, adds comment)
By Jan Harvey
LONDON, Sept 29 (Reuters) - Gold climbed 3 percent on Monday
as fresh worries over the health of the global financial sector
sparked buying of safe-haven assets such as bullion.
In euro terms, gold was up nearly 5 percent.
However, other precious metals used in industry slipped.
Platinum and palladium wilted as fears over the outlook for
the automotive sector prompted selling, while silver, used in
products such as batteries and bearings, fell as the uncertain
economic outlook prompted demand fears.
"Gold was weaker earlier on, but it has bounced back," said
Stephen Briggs, metals analyst at RBS Global Banking & Markets.
"For the moment, it is breaking away from its slavish attachment
to the dollar."
"It doesn't look as though the financial problems are going
to pass quickly, so this is gold's moment in the sun," he said.
Spot gold <XAU=> was quoted at $898.60/900.60 at 1427 GMT,
up 2.3 percent from $878.40 at the nominal New York close on
Friday.
Gold priced in euros meanwhile rose nearly 5 percent to a
day high of 629.35 euros, against 600.99 euros at the nominal
close on Friday.
U.S. stock markets tumbled on Monday as investors worried
about the stability of banking stocks after Wachovia Corp <WB.N>
became the latest to succumb to the credit crisis, having agreed
to sell its banking operations to Citigroup <C.N>.
The falls prompted a flight to safety among investors. The
U.S. 30-year Treasury bond gained more than 2 full points in a
powerful safe haven rally. []
"A lot of people who would never have thought about gold are
seeing it as a safe asset right now," said Commerzbank senior
trader Michael Kempinski.
News of a state buyout of Fortis Bank, and government
intervention in ailing U.K. mortgage lender Bradford & Bingley,
had already scared the European markets.
Gold largely managed to shrug off a strengthening in the
dollar, as financial market problems spread beyond the United
States. []
The other main external driver of gold, crude oil, also
slipped, with prices sliding more than $6 a barrel as traders
worried the turmoil in financial markets would affect demand.
[]
Traders are now awaiting further news on a $700 billion U.S.
plan to bail out the financial sector, on which Congress is due
to vote. []
SUPPLY, DEMAND SUPPORT
Gold is also benefitting from positive supply and demand
news. Germany's Bundesbank said on Monday it does not plan to
sell any of its gold reserves over the next 12 months, aside
from a small sale already agreed. []
Central bank selling has been an important source of supply
in recent years. Germany holds the world's second-largest gold
reserves after the United States.
Meanwhile demand from gold-backed exchange-traded funds is
firm. Holdings of the world's largest bullion-backed ETF, SPDR
Gold Trust <GLD>, are at 724.63 tonnes, close to record levels.
London-based ETF Securities said its gold holdings also rose
last week. []
Among other precious metals, silver <XAG=> eased to
$13.01/13.09 from $13.29 at the nominal New York close on
Friday.
Platinum <XPT=> slid to $1,085/1,105 an ounce against $1,108
an ounce, while palladium <XPD=> fell more than 4 percent to
$212/220 from $221.
Zurich Cantonal Bank (ZKB) said the stock of metal it holds
to back its platinum exchange-traded fund <ZPLA.S> has risen 27
percent since July 23 to 83,000 ounces. []
(Reporting by Jan Harvey; Editing by Peter Blackburn)
