* Gold steadies by midday after moving in $11 range
* Nikkei gains 3 pct, plucking gold from lows
* Oil slips towards $62 on recession worries
(Updates prices)
By Lewa Pardomuan
SINGAPORE, Oct 28 (Reuters) - Gold steadied above $730 an
ounce Tuesday after equities reversed losses but a rallying
dollar was likely to curb gains, with traders looking next to
an expected U.S. interest rate cut and economic data for
direction.
Platinum also bounced but held near five-year lows on
worries about falling demand for autocatalysts after automakers
cut output. Honda Motor Co <7267.T>, Japan's second-largest
carmaker, said on Tuesday it would cut output of its Civic
compact in the U.K. from December to meet falling demand in
Europe. []
Gold <XAU=> was trading at $733.40, up $3.80 from New
York's notional close on Monday. It hit an intraday high of
$735.20 before slipping to hit a low of $723.70 after falling
equity markets forced investors to sell gold to cover margin
calls.
"I am a bit neutral with a slight downward bias on gold.
The dollar is still on a strong rally while euro and the pound
are still on a downward slide," said Adrian Koh, analyst at
Phillip Futures in Singapore.
"I guess this week, the focus will also be on the Fed
meeting," said Koh, who expected gold to trade in a range of
between $700 and $750 an ounce.
Gold fell to a session low of $706.10 on Monday on heavy
fund selling, not far from the 13-month low of $680.80 it
touched last Friday.
It has fallen as much as 27 percent since touching a
two-month high of $931 on Oct. 10 after losses in equity
markets forced investors to cash in, with falling oil prices
and a surging dollar adding to the selling pressure,
overshadowing its potential appeal as a safe haven in the
financial storm.
Bullion was well below a record high of $1,030.80 hit in
March.
The euro eased to $1.2430 <EUR=>, having fallen as low as
$1.2329 on EBS. Dealers watched movements in the dollar amid
expectations the Federal Reserve will lower interest rates at
its two-day meeting starting on Tuesday. [].
Thursday's third-quarter U.S. GDP data -- expected to show
the economy contracted by 0.5 percent -- could also guide
precious metals as fears of a global recession escalate.
The Nikkei <> rose 3 percent as investors picked up
beaten-down shares such as Honda Motor <7267.T> after the
benchmark briefly broke below 7,000 for the first time in 26
years. []
"We saw some short covering after the market ended below
$745 during New York trading but sell-back from the Japanese
later emerged," said a dealer in Hong Kong.
"I guess trading range will still be the same at $710 to
$750. Platinum did move up a bit but it lacked strength to
sustain the gains," he said.
Platinum <XPT=> was trading at $780.00 ounce, up $7.50 from
New York's notional close on Monday, when it fell as low as
$732.50 an ounce. Platinum has lost almost a quarter of its
value since spiking to a lifetime high of $2,290 in March.
The automotive sector, which accounts for around half of
all platinum demand, has been hit hard by the prospect of
recession.
Weaker oil prices also put pressure on platinum. U.S. crude
futures fell for a third day to below $63 a barrel as global
recession concerns continued to dent demand. []
New York gold futures <GCZ8> fell $6.6 an ounce to $736.3.
Precious metals prices at 0501 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 733.40 3.80 +0.52 -11.93
Spot Silver 9.04 0.03 +0.33 -38.79
Spot Platinum 780.00 7.50 +0.97 -48.68
Spot Palladium 167.50 0.00 +0.00 -54.48
TOCOM Gold 2198.00 88.00 +4.17 -28.17
43776
TOCOM Platinum 2374.00 71.00 +3.08 -55.53
10098
TOCOM Silver 270.10 10.60 +4.08 -50.07
608
TOCOM Palladium 536.00 28.00 +5.51 -60.33
252
Euro/Dollar 1.2464
Dollar/Yen 93.74
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Editing by Ben Tan)
