* Oil, base metals slide after Monday bounce
* Equities slip in Europe, Wall Street opens lower
* Dollar firms as stock market fall sparks flight to safety
(Updates prices)
By Jan Harvey
LONDON, Nov 11 (Reuters) - Gold slipped 2 percent on
Tuesday, silver tumbled 5 percent and platinum fell more than 4
percent as the dollar firmed versus the euro and commodity
prices declined.
A recovery in faltering oil and industrial metals prices on
Monday had helped precious metals to climb, but the recovery was
short-lived as fears over the outlook for the global economy
resurfaced.
"Gold has been dragged lower by stronger dollar and lower
oil prices," said Pradeep Unni, senior analyst at Richcomm
Global Services.
"With confirmed evidence of (a) bleak economic outlook in
the euro zone and UK, traders and investors prefer to cling to
the U.S. dollar rather than other currencies."
"The slide in other commodities, especially oil and copper,
is also creating an additional barricade in gold's path
northwards," he added.
Spot gold <XAU=> was at $728.40/730.40 an ounce at 1607 GMT,
down from $745.75 late in New York on Monday, when it rose as
much as 3 percent. Silver <XAG=> slipped to a low of $9.54, and
was later quoted at $9.62/9.70 an ounce from $10.18.
Oil and industrial metals prices slipped, with U.S. crude
futures falling to below $59 a barrel as a slide in global stock
markets refocused attention on the prospect of a downturn.
[]
Wall Street fell at the open and European shares were lower
as optimism sparked by near-$600 billion stimulus package
announced by China on Monday evaporated. Its losses are
pressuring all the commodities, including gold.
"Gold is not living up to its reputation as a safe haven at
present, and to a lesser extent is behaving like any other
commodity," said Commerzbank in a note.
The dollar, a key external driver of gold, was broadly
supported on Tuesday by weakness in equity prices, which is
prompting investors to seek out the U.S. currency as a haven
from risk. []
Gold is often bought as an alternative investment to the
dollar and tends to move in the opposite direction to it.
Prices are likely to consolidate in the short term, analysts
said, with the market eyeing the outcome of this weekend's G20
summit in Washington, where world leaders will discuss the
financial crisis.
PLATINUM TUMBLES
Platinum prices slipped more than 4 percent after climbing
on Monday as traders hoped the Chinese stimulus package could
lead to a recovery in demand for the industrial precious metals.
Platinum and palladium prices have been pressured sharply
lower in recent months as traders fretted over the outlook for
demand from carmakers, who consume around half of the world's
platinum group metals.
Shares in General Motors <GM.N>, the world's biggest
automaker, slid to a 62-year low as Deutsche Bank lowered its
equity value on the stock to zero.
Stillwater Mining said on Monday that due to falling metals
prices it is looking to adjust its operations to conserve cash.
The miner said its full-year 2008 production is likely to be
still lower than its most recent forecast of 515,000-525,000
ounces, which it had already cut from an initial estimate of
550,000-565,000. []
Stillwater, a unit of Russia's Norilsk Nickel <GMKN.MM>, is
the only significant producer of platinum group metals (PGM)
outside South Africa and Russia.
Spot platinum <XPT=> was quoted at $811/831 an ounce, down
from $847 late in New York on Monday. Palladium <XPD=> was at
$215/223 an ounce from $218.50.
(Reporting by Jan Harvey; editing by Karen Foster)
