* London trading winds down early for New Year holiday
* Gold gains in 2008, but other precious metals falter
(Updates with New York close, adds comment)
By Rene Pastor and Jan Harvey
NEW YORK/LONDON, Dec 31 (Reuters) - Gold rallied late on
Wednesday on investor short-covering before the New Year's
break, bucking softer oil prices over the last few months as
the metal burnished its reputation as a safe haven in a
turbulent 2008.
The precious metal is poised to be one of the only
commodities to post a gain year-on-year as the rest of the
commodity sector was ravaged by investment fund deleveraging
amid the gloom of a deepening global recession.
The February gold contract <GCG9> on the COMEX division of
the New York Mercantile Exchange climbed $14.30 to finish 2008
at $884.30 an ounce, having moved between $857.30 and $886.00.
Spot gold <XAU=> was quoted at $879.40/882.40 an ounce at
1918 GMT, versus the Wednesday midsession quote of
$858.55/$861.55. The metal wound up above its 2007 close of
$833.20, according to Reuters data.
"Gold is the only (metal) that has been up this year," said
Nick Moore, commodity strategist at RBS Global Banking &
Markets. "It has been a fantastic performance for gold. It has
done what it should have done."
"We'll just continue to rally into the New Year," added
Frank McGhee, head precious metals trader of Integrated
Brokerage Services LLC in Chicago.
In contrast to gold, oil prices have tumbled 60 percent in
2008, while base metals are set to post their worst year on
record. []
Interest in bullion as a haven from risk has expanded amid
turmoil in the global financial system, counteracting pressure
from a strengthening dollar and a faltering oil market.
In early business, gold lost ground from profit-taking and
was pressured by the fall of crude to below $38 a barrel as
worries a creaky economy would dent demand spooked investors.
[]
Another main external driver of gold, the dollar,
strengthened against the euro, reversing earlier losses, and
was on track to post its first annual rise versus the single
currency in three years. []
Steve Platt, an analyst for Archer Financial Services, said
the dollar's steadiness also put pressure on the metal in early
business.
Strength in the dollar reduces bullion's appeal as an
alternative investment.
Unlike gold, the other precious metals, which are primarily
used in industry, look set to post losses year-on-year.
Silver ended last year at $14.77 an ounce, but softened
Wednesday to $11.04/11.14.
Platinum <XPT=> was quoted at $931/936 an ounce, while
palladium <XPD=> stood at $184.50/189.50. Platinum prices look
set to fall sharply on the year, having closed 2007 at $1,520
an ounce, according to Reuters data.
The metal has been knocked sharply lower this year by the
economic slowdown, which has curbed demand for cars. The
automotive sector is responsible for around half of global
platinum demand.
(Additional reporting by Julie Crust; Editing by Christian
Wiessner)
