* Gold reverses gains as dollar climbs, oil falls
* Lower oil prices also push prices lower
* Markets seen volatile ahead of quarter's end on Friday
(Adds comments; updates prices)
By Julie Crust
LONDON, Oct 30 (Reuters) - Gold reversed earlier gains of
almost 3 percent on Thursday as the dollar turned higher and oil
prices declined.
Spot gold <XAU=> was at $739.00/741.50 an ounce at 1557 GMT
compared with $754.30 late in New York on Wednesday. It earlier
rose to $776.30 an ounce, the highest price since Oct. 21.
"We are seeing a similar pattern to base metals with a
strong opening and then giving up all the gains," said Nick
Moore, strategist at Royal Bank of Scotland. "The dollar
strength is one element."
The dollar hit session highs against the euro after trading
lower for most of the global session, as investors bought back
the greenback to rebalance portfolios for month-end purposes.
[]
"There will be quite a lot of jockeying tomorrow as we come
to the last trading day and I wouldn't be surprised to see a
fairly wild day for not just gold but a number of other
commodities," Moore said.
Lower oil prices also reduced gold's appeal as a hedge
against inflation.
Oil <CLc1> fell toward $65 a barrel, retreating from earlier
gains, pressured by concerns demand might continue to weaken as
the U.S. economy shrank in the third quarter. []
The world's largest economy shrank at a 0.3 percent annual
rate in the third quarter, the sharpest contraction in the
United States in seven years. []
Gold, which traded around $800 earlier this month, was still
well below the record high of $1,030.80 hit in March, after a
rally to a two-month high of $931 on Oct. 10 was met by heavy
selling.
"Precious metal sentiment received a much needed boost
yesterday as the dollar retreated after the Fed's rate cut,"
analyst Manqoba Madinane at Standard Bank said in a research
note.
Gold is still down almost 12 percent since the start of the
month, on track for its biggest monthly decline since 1983, as an
earlier rush for safe-haven assets gave way to a cross-commodity
sell-off by investors scrambling for cash.
"I think all the preconditions are there for gold to take a
very healthy run. The physical demand for gold has actually
exceeded the ability to supply right around the world," said Ian
Smith, managing director of Newcrest Mining Ltd <NCM.AX>,
Australia's largest gold producer.
Silver <XAG=> was trading at $9.86/9.96 an ounce after
rising almost 7 percent to a high of $10.50 against Wednesday's
$9.82.
Platinum <XPT=> was trading at $808.50/838.00 an ounce,
after earlier hitting a high of $870.00 an ounce from $793.50.
Lonmin Plc <LMI.L>, the world's third-largest platinum
producer, said the outlook for platinum prices remained
challenging. []
Prices for platinum have fallen about 45 percent so far this
year and there has been a liquidation from platinum exchange
traded funds in recent days.
"From a peak of nearly 500koz in July, holdings have been
reduced to about 245koz now, with a large, 46koz redemption
noted on 29 October from ETF securities, more than a quarter of
its holdings in a single tranche, John Reade, UBS precious
metals analyst, said in a note.
Palladium <XPD=> was at $193.5/203.5 from $194.50.
(Editing by Karen Foster)
