* Gold pressured by technical selling, platinum drop
* Platinum falls more than 5 pct on automaker worries
* ECB says plans to renew Central Bank Gold Agreement
(Recasts, updates with quotes, closing prices, adds NEW YORK
to dateline)
By Frank Tang and Jan Harvey
NEW YORK/LONDON, April 28 (Reuters) - Gold dropped more
than 2 percent Tuesday on the back of sharply lower platinum
prices amid demand worries and technical selling, tempting
bullion investors to lock in profits.
Other precious metals also fell, with platinum and
palladium both down more than 5 percent at their session lows
on worries about an uncertain future of U.S. automakers, and
silver was off more than 4 percent.
Spot gold <XAU=> traded at $893.60 an ounce at 3:08 p.m.
EDT (1908 GMT), down 1.5 percent from its late Monday quote of
$906.75 an ounce in New York.
U.S. gold futures for June delivery <GCM9> settled down
$14.60, or 1.6 percent, at $893.60 an ounce on the COMEX
division of New York Mercantile Exchange.
The yellow metal made good gains on Monday as equity
markets slipped, due partly to fears a swine flu outbreak could
hurt the economy, and on hopes China would continue to buy
gold.
For more coverage on swine flu, please click on []
But its failure to sustain those gains through technical
resistance at $918.50 an ounce, identified by analysts who
study charts of past price movements, sparked selling.
Gerry Schubert, director of precious metals at Fortis Bank,
said gold's sharp move lower overnight had set a downward trend
in the market, and that the opening of New York trading had
seen a spate of technical selling and weak long liquidation.
"In the last two days, we are down $30, and that is too
much for you not to have to react if you are a technical trader
and long," he said.
The boost provided by news that China has hiked its gold
reserves by three-quarters since 2003 has largely petered out,
traders said. Nout Wellink, a member of the governing council
of the European Central Bank, said China's move to diversify
reserves was positive, but unsurprising. []
He also said the bank planned to renew the Central Bank
Gold Agreement, which restricts signatories' gold sales to 500
tonnes a year, when it expires in September.
Gold and gold receivables held by euro zone central banks
fell sharply in the week to April 24, down 823 million euros,
the ECB said separately. []
PANDEMIC FEAR
On the wider markets, platinum group metals followed
equities to trade lower as concerns grew over the potential
economic impact of the swine flu outbreak, though U.S. shares
managed to recover opening losses as economic data cheered
traders. []
"I think gold is actually taking its cues from platinum and
palladium, which are off sharply on profit taking and concerns
over General Motors and Chrysler," said Jeffrey Christian,
managing director of CPM Group.
More bad news for automakers emerged on Monday as General
Motors <GM.N> offered its final reorganization plan by slashing
bond debt, cutting more than 21,000 more U.S. jobs and emerging
as a nationalized carmaker under the control of the U.S.
government.
Traders are awaiting fresh direction from the outcome of a
two-day meeting of the U.S. Federal Open Market Committee.
Among other precious metals, spot platinum <XPT=> fell more
than 6 percent to a low of $1,066.50, and was last at $1,084.50
an ounce, down 4.8 percent from its late Monday quote of
$1,139.
Palladium <XPD=>, meanwhile, touched a low of $210.50, down
5.6 percent, and was last at $212.50 an ounce, down 4.7 percent
from its previous finish of $223.
The metals, mainly used in autocatalyst manufacturing, have
suffered from a decline in the car industry during the last
year.
Silver <XAG=> was at $12.48 an ounce, down 3.2 percent from
its previous finish of $12.89.
(Reporting by Frank Tang and Jan Harvey; Editing by Lisa
Shumaker)
