* Gold slides 1 pct as dollar hits 5-month high vs euro
* Commodity weakness spurs selling of gold
* Platinum steadies, consolidating below $1,600
(Recasts, updates throughout, changes dateline, pvs
SINGAPORE)
By Jan Harvey
LONDON, Aug 8 (Reuters) - Gold slipped 1 percent in Europe
on Friday as the dollar firmed to a five-month high against the
euro, denting the precious metal's appeal as a currency hedge,
and as oil prices fell.
Gold <XAU=> was at $863.25/864.25 an ounce at xx GMT, down
from $871.05/872.45 late in New York. Earlier the metal hit a
session low of $862.00 an ounce, an eight-week trough.
The dollar also surged against the pound, while the dollar
index struck a five-month high as the economic global slowdown
dented confidence in other currencies. []
Commerzbank trader Rory McVeigh said the precious metal's
decline was down to "dollar strength today, (with) dwindling
commodity prices as a back drop".
Commodities are posting losses almost across the board, with
copper, coffee, sugar and oil all declining.
Oil slipped more than $1 a barrel as supply fears eased, and
as the firmer dollar prompted funds to exit commodities.
[]
Weaker crude tends to pressure gold, as the precious metal
is often bought as a hedge against oil-led inflation.
Barclays Capital said in a note on Friday: "The summer
doldrums have well and truly hit the commodity markets."
"Sentiment has turned extremely negative and prices have
fallen across a broad range of different markets, irrespective
of differing fundamental dynamics and outlooks."
Investors are shifting away from commodity indices into
commodity-linked exchange traded products, with about $10
billion invested in ETPs over the first half of 2008, compared
to less than $4 billion in the same period of 2006 and 2007.
Silver bullion held by the iShares Silver Trust <SLV.A>, the
world's largest silver-backed exchange-traded fund, fell 1
percent to 6,197.33 tonnes on August 7, the trust said.
* Gold hits lowest in 8 weeks on rising dollar
* Platinum sheds early gains
(Updates prices, adds quotes, activity in physical market)
By Lewa Pardomuan
SINGAPORE, Aug 8 (Reuters) - Gold tumbled to an eight-week
trough in volatile trade on Friday, losing some of its shine as
an alternative investment after the dollar jumped against the
euro, prompting some investors to switch funds back into
currencies.
But lower prices spurred buying from jewellers in India, the
world's main consumer, and other countries in Asia. Platinum
failed to sustain gains as fears of supply curbs following a
one-day strike in main producer South Africa subsided.
Silver tumbled to its weakest since late January, tracking
gold.
"It's very bearish. Oil prices are dropping, the dollar is up
and platinum is very bad. People are scared about the volatile
market," said Ronald Leung, director of Gold Dealers in Hong
Kong.
Gold has dropped more than 15 percent in value since spiking
to a record high of $1,030.80 hit in March.
The euro extended losses against a broadly stronger dollar to
fall more than 1 percent as concerns about the region's growth
outlook weighed on the European currency. []
In Singapore, physical dealers reported buying interest from
India ahead of Hindu festivals which culminate with Diwali in
October, pushing up premiums for gold bars to 75 U.S cents to the
spot London price from 60 cents last week. <GOLD/ASIA1>.
"In the absence of commodity-type news, I think the market is
probably going to be weaker. I think it's mainly dollar-dominated
today," said Mark Pervan, an ANZ senior commodity analyst.
"I think around $850 would be a critical level," said Pervan,
who pegged resistance at $900.
Spot platinum <XPT=> fell to $1,565.00/1,577.00 an ounce from
$1,572.00/1,592.00 late in New York, having hit a high of
$1,578.50 an ounce.
"As for platinum, $1,550 may be the next target. If you
compare with Johnson Matthey's forecast, this is incredibly
cheap," said Yukuji Sonoda, precious metals analyst at Daiichi
Commodities.
Platinum prices have taken a dramatic turn since spiking to a
record high at $2,290 an ounce in early March, losing much of
their gains to profit taking and a slowing U.S. economy that
threatens to slash demand for autocatalysts.
The current price was well below the target of $2,500
forecast in May by Johnson Matthey <JMAT.L>, the world's largest
platinum refiner and distributor, citing output shortfalls and
strong demand.
The bulk of the world's platinum is used by automakers in
autocatalyst systems that scrub exhaust fumes of dangerous and
environmentally damaging chemicals.
The most active Tokyo platinum contract for June 2009
delivery <0#JPL:> on the Tokyo Comodity Exchange fell 49 yen per
gram to 5,506 yen.
New York gold futures <GCZ8> fell $6.3 to $871.60 an ounce.
Spot palladium <XPD=> dropped to $342.00/350.00 an ounce from
$344.00/352.00 late in New York. Silver <XAG=> fell to
$15.85/15.90 an ounce from $16.14/16.23.
