* Gold strikes lowest in nearly a year before bouncing
* Other precious metals at multi-month lows
(Updates prices, adds quotes)
By Lewa Pardomuan
SINGAPORE, Sept 10 (Reuters) - Gold pared early losses on
Wednesday as oil staged a rebound, which helped bullion resist
selling from speculators that had sent the price to its weakest
in nearly a year.
Platinum tumbled to its weakest since March last year, with
fears of falling demand for autocatalysts adding to the selling
pressure. Silver was at its lowest level in nearly two years
and palladium at its weakest since November 2005.
Spot gold <XAU=> hit an intraday low of $762.55 an ounce,
its weakest since late October 2007, down 1.7 percent from
$775.80/777.80 in late New York on Tuesday. It later bounced to
$770.70/771.65 an ounce.
"I think we are seeing some market switching. This is very
much a currency, oil play. I think $740 looks like a key
level," said Mark Pervan, an ANZ senior commodity analyst in
Melbourne.
"I think it goes through $760, I think it could move to
$740 very quickly and then there's no reason why it wouldn't
test $700 an ounce within four or five weeks if we continue to
see the strengthening of the dollar," he said.
Bullion last traded around $700 in September last year.
Gold has dropped more than 20 percent since hitting a
four-month high of $987.75 an ounce in mid-July and hovered
well below a lifetime high of $1,030.80 hit in March 2008.
Oil <CLc1> jumped more than $1 a barrel on Wednesday,
reversing early losses after OPEC unexpectedly agreed to cut
production by just over 500,000 barrels per day (bpd) from July
levels. []
Gold tracked oil because of its role as a hedge against
inflation, while currencies also dictate movements in bullion
because investors buy the metal as an alternative investment.
"Selling pressure intensified especially after breaking
below this year's low reached in August," said Tatsuo Kageyama,
an analyst at Kanetsu Asset Management in Tokyo.
"Crude oil's plunge and the strength of the dollar are
putting a lot of selling pressure in gold. As long as crude
prices are falling, investors will continue liquidating their
positions in gold."
The dollar index <.DXY>, which measures the greenback's
value against six major currencies, was little changed at
79.380 on Wednesday, below a one-year peak of 79.844 hit on
Monday, according to Reuters data.
"Funds cashed in gold to cover losses from weakening U.S.
stock markets. I think may see some physical offtake in Asia
because of the falling prices but I am afraid there's still a
chance for gold to head lower," said a dealer in Hong Kong.
"We will probably try $750," he said.
The benchmark contract for August 2009 delivery <0#JPL:> on
the Tokyo Commodity Exchange ended the morning session 251 yen
per gram lower at 4,193 yen, having tumbled by the 300 yen
daily limit to 4,144 yen per gram, its lowest since December
2006.
Tokyo futures and cash platinum have been hit by heavy
selling as slowing global economy and poor car sales in the
U.S., China and Japan sparked fears of falling demand for
autocalysts.
Autocatalysts, used to clean exhaust fumes, account for
more than 50 percent of global demand.
New York gold futures <GCZ8> lost $16.0 to $776.00 an
ounce.
Precious metals prices at 0224 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 771.60 -5.15 -0.66 -7.34
Spot Silver 11.16 -0.09 -0.80 -24.44
Spot Platinum 1226.50 -3.50 -0.28 -19.31
Spot Palladium 223.00 -7.00 -3.04 -39.40
TOCOM Gold 2673.00 -110.00 -3.95 -12.65
39359
TOCOM Platinum 4193.00 -251.00 -5.65 -21.46
15791
TOCOM Silver 388.10 -25.60 -6.19 -28.26
859
TOCOM Palladium 790.00 -90.00 -10.23 -41.52
1810
Euro/Dollar 1.4129
Dollar/Yen 107.15
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 Chikafumi Hodo in TOKYO)
(Editing by Louise Heavens)
