* Stocks rally on U.S. plan to pump $250 billion into banks
* Dollar down vs euro as investors cheer European bank plans
* Oil, other commodities post strong gains
(Recasts, updates throughout, changes dateline, pvs SINGAPORE)
By Jan Harvey
LONDON, Oct 14 (Reuters) - Gold and other precious metals
rose on Tuesday as fresh plans to stabilise the banking sector
sparked a rally in commodities, with platinum up more than 6
percent and silver climbing 4 percent.
But analysts said gold could come under pressure in later
trade if equities extended their gains, curbing interest in the
precious metal as a haven from risk.
Spot gold <XAU=> jumped 2 percent to a session high of
$853.50 an ounce and settled back to $850.60/853.60 by 0942 GMT,
against $830.80 in late New York trade on Monday.
"Equities, and markets in general, are picking up, which is
supporting commodities," said Standard Bank analyst Walter de
Wet. "But if market sentiment improves, gold will struggle more
and more to make higher ground, especially if the U.S. dollar
remains at current levels or strengthens."
Financial markets surged after news that the United States
could pump $250 billion into U.S. banks in what Federal Reserve
chairman Ben Bernanke called a comprehensive attempt to end the
credit crisis. []
Both equities and commodities bounced after the
announcement, with European shares rising more than 5 percent,
tracking a sharp rise in Asian markets. []
On the currency markets, the dollar slipped against the euro
as investors cheered European plans to stabilise floundering
banks, after Britain, Germany and France announced plans to
recapitalise their banking systems. []
WEAKER DOLLAR
A weaker greenback, as well as the recovery in equities and
an improvement in investors' outlook for the global economy,
sparked fresh buying of commodities, with oil and industrial
metals all trading higher after heavy losses last week.
The Reuters-Jefferies CRB index <.CRB> rose 3 percent to
298.70 on Monday, after scoring its lowest since January 2007
last week.
Oil prices surged more than $2 a barrel on Tuesday,
extending the previous session's 4 percent gains, as the
governments' moves to rescue banks fuelled hopes a global
recession could be averted. []
Rising crude prices boost interest in gold as a hedge
against oil-led inflation, and enhance the appeal of commodities
as an asset class.
But analysts fear a recovery in the stock markets could
pressure gold if it continues. The precious metal has held up
well in recent weeks as stocks sold off, with investors buying
gold as a haven from risk. That position may now be reversed.
"The normal fundamental factors are again playing a stronger
role, while flows out of the save haven might still be negative
for gold," said investment bank Dresdner Kleinwort in a note.
Among other precious metals, silver tracked gold higher to
rise 4 percent at its session high of $11.10 an ounce. Silver,
which is primarily viewed as an industrial metal, is also
benefiting from hopes more stable markets could support demand.
Spot silver was at $10.92/11.00 an ounce against $10.66 in
late New York trade on Monday.
Platinum and palladium, which are also largely traded as
industrial metals, climbed, with platinum gaining more than 6
percent to its session high of $1,040 an ounce.
Both metals have posted sharp losses in recent months as
investors worried about the demand outlook for the car industry,
which accounts for around half of total platinum demand. This
could curb further gains, analysts say.
"With real demand still under pressure, people might be a
bit scared to take substantial long positions (in platinum),"
said Standard Bank's de Wet.
Spot platinum was at $1,021.50/1,041.50 an ounce, up from
$978.50 in late New York trade on Monday, while palladium
was at $202.50/210.50 an ounce against $196.50.
(Reporting by Jan Harvey; editing by Christopher Johnson)
