* Gold rebounds from lowest in nearly a year
* Other precious metals at multi-month lows
(Recasts, adds quotes, activity in physical market)
By Lewa Pardomuan
SINGAPORE, Sept 10 (Reuters) - Gold advanced on Wednesday
after a rebound in oil prices, which helped the metal resist
selling pressure from speculators who had sent prices to their
lowest 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=> rose to $778.70/779.90 an ounce, up 0.4
percent from $775.80/777.80 in late New York and was off an
intraday low of $762.55 an ounce, its weakest since late
October 2007.
Physical buying from jewellers also helped pluck gold from
the lows, but dealers said sentiment had turned bearish after
gold's failure to hold above the psychological level of $800.
"For gold to turn around, we willrequire a change of
sentiment in the tradingenvironment. Gold is expected to trade
between $750 and $820 in the short term," said William Kwan,
bullion director at Gold Capital Management in Singapore.
Oil <CLc1> rebounded from a five-month low after OPEC
agreed to a small but unexpected production cut that some
analysts said showed their resolve to keep prices above $100 a
barrel. []
"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 if 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.
The yen trimmed earlier losses against the dollar and euro
on after Korea Development Bank confirmed talks had ended for
now with Lehman Brothers <LEH.N> over a possible investment.
[]
Gold tracks 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.
In the physical market, premiums for premiums for gold bars
have jumped as much as 33 percent in the past week after a drop
in bullion prices spurred buying from jewellers across Asia,
forcing dealers to scramble for supplies. []
"Generally it is seen that physical demand does not cause a
spike in prices but rather acts as a floor to prevent prices
from sliding," said Pradeep Unni, senior research analyst at
Richcomm Global Services DMCC in Dubai.
The benchmark contract for August 2009 delivery <0#JPL:> on
the Tokyo Commodity Exchange fell 258 yen per gram to 4,186
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 $10.7 to $781.30 an
ounce.
Precious metals prices at 0748 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 777.50 0.75 +0.10 -6.63
Spot Silver 11.34 0.09 +0.80 -23.22
Spot Platinum 1218.50 -11.50 -0.93 -19.84
Spot Palladium 226.00 -4.00 -1.74 -38.59
TOCOM Gold 2696.00 -87.00 -3.13 -11.90
82756
TOCOM Platinum 4173.00 -271.00 -6.10 -21.84
28390
TOCOM Silver 393.00 -20.70 -5.00 -27.36
1680
TOCOM Palladium 823.00 -57.00 -6.48 -39.08
2905
Euro/Dollar 1.4157
Dollar/Yen 107.26
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 Ben Tan)
