* U.S. equities end with huge gains as confidence returns
* Central banks, governments enact coordinated bank rescue
* Oil, other commodities gain as recessionary fears wane
(Updates lede, prices, adds New York comment)
By Carole Vaporean and Jan Harvey
NEW YORK/LONDON, Oct 13 (Reuters) - Gold prices fell on
Monday as investors unwound some safe-haven positions amid a
surge in worldwide equities markets.
Late in the session, gold was pulled up from its 10-day low
by the dollar's decline against the euro. The dollar slid to a
three-week low against the euro after a unified European
government plan to pump billions into troubled banks was
announced. []
The European bank rescue plan boosted equity markets in the
U.S., Europe and Asia, prompting investors to close out of some
safe-haven investments like gold and bonds.
Spot gold <XAU=> fell 3 percent to a session low of
$821.00, and was quoted at $831.75/835.75 an ounce at 2005 GMT,
down from $847.40 in late New York trade on Friday.
December gold <GCZ8> cut its losses to close down $16.50,
or 1.92 percent, at $842.50 an ounce on the COMEX division of
the New York Mercantile Exchange. COMEX gold hit a 10-day low
at $824.50 an ounce.
"What you're seeing is a reallocation of funds, (investors)
taking money out of that safe haven, inflationary asset like
gold and moving into equities," said Alaron Trading metals
analyst David Meger.
"The coordinated efforts by the U.K. and the Eurozone are
going a long way to instill investor confidence right now,"
said Meger.
Wall Street rebounded from its worst week on record with
its best single day ever on Monday, as countries around the
world pledged to pour cash into struggling banks to prop up the
global financial system and restore confidence. []
On Friday, the yellow metal swung in a wide range as
turmoil in 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 price decline.
"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.
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.
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 Australian banks
earlier announced calming moves of their own. []
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
rose, though holdings of its platinum and palladium-backed ETCs
declined. []
Silver <XAG=> climbed more than 5 percent to a session high
of $10.84 an ounce, up from $10.14 in late New York trade on
Friday. Later it was trading at $10.65/10.75.
Analysts said the industrial component in silver prompted
investors to renew support now that stability seems to have
returned to financial markets.
"Silver, having the larger industrial component, was
obviously taking a little relief rally off the
anti-recessionary theme," said Alaron's Meger.
Palladium <XPD=> climbed more than 5 percent to a high of
$200 an ounce, before settling back to trade at $195.50/207.50
an ounce against $188 on Friday.
Platinum languished, however, on fears demand from
carmakers will be lacklustre this year and into next year. Spot
platinum <XPT=> was at $976.00/1,000.00 an ounce against
$980.50 late on Friday.
(Editing by Christian Wiessner)
