* Gold down 5 pct, silver sinks 10 pct, PGMs tumble
* Dollar surges vs euro on fears over euro zone growth
* Oil slips as much as $3 a barrel on demand fears
(Recasts, updates with quotes, closing prices, market
activity, adds NEW YORK to dateline)
By Frank Tang and Jan Harvey
NEW YORK/LONDON, Aug 15 (Reuters) - Gold found support
below $790 an ounce after falling nearly 5 percent in early
sessions on Friday, as the precious metals' downward slide ran
out of steam following a powerful dollar rally.
Spot gold <XAU=> hit an intraday low of $773.90, its
weakest since Nov. 20, and was last at $787.65/789.25 by New
York's last quote at 2:15 p.m. EDT (1815 GMT), down from
$811.25/812.65 late in New York on Thursday.
U.S. gold contract for December delivery <GCZ8> settled
down $22.40, or 2.8 percent, at $792.10 an ounce on the COMEX
division of New York Mercantile Exchange.
"We saw far stronger than expected support at the November
lows, (and) the euro has stabilized and found some support,"
said Dresdner Kleinwort consultant Peter Fertig.
A strengthening dollar and fears over slower growth
prompted investors to sell off commodities earlier in the day.
Losses across precious metals were led by silver, which
slipped 12 percent, or $1.76 an ounce, in Asian trade, amid
talk of large-scale selling by a Far Eastern bank.
Frank McGhee, head precious metals trader of Integrated
Brokerage Services in Chicago, said that massive stop-loss
orders originated in the Asian markets led the whole precious
metals complex sharply lower.
A firmer dollar typically pressures bullion, which is often
bought as an alternative investment to the U.S. currency.
Strength in the greenback also makes dollar-priced commodities
more expensive for holders of other currencies.
The dollar hit a six-month high against the euro which
traded below $1.47 against the dollar, its lowest level since
February, weighing heavily on all commodities. []
The dollar has rallied 5 percent against the single
currency this month.
"People are dollar-bullish at the moment," said Simon
Weeks, director of precious metals at the Bank of Nova Scotia.
"Inflation will restrict the Fed's ability to cut rates,
plus we have weaker growth in Europe, so the euro has been
suffering," he added. "The dollar is coming out on top at the
moment, so people have been liquidating commodities."
SUPPORT TESTED
Gold is now holding above key support in the $770s, with
any break lower potentially taking the precious metal down to
$750.
However, Ralph Preston, futures analyst at
HeritageWestFutures.com in San Diego, said investors could
often profit from buying precious metals as they are now
trading sharply below their 200-day moving averages.
Oil prices have also slipped, reaching a session low of
under $113 a barrel, as fears over weakening global demand
dampened interest in crude. []
Falling crude prices reduce gold's appeal as a hedge
against oil-led inflation, and can undermine confidence in
commodities as an asset class, analysts said.
Negative sentiment in the commodity markets in recent
months can be seen in the performance of indices such as the
Reuters-Jeffries/CRB index <.CRB>, which has fallen almost 18
percent since early July.
Silver suffered the most in the sell-off of precious
metals, with prices plummeting to a low of $12.39 an ounce,
their weakest since last September, in Asian trade.
Platinum and palladium slipped in silver's wake, shedding 7
percent and 6 percent respectively. Both have suffered
significant losses in recent weeks on fears faltering global
growth could affect car demand.
"The more industrial precious metals, like silver and
platinum, are also being hampered by concerns about global
growth -- demand for platinum in autocatalysts, and for silver
in its industrial offtakes," said Calyon analyst Robin Bhar.
Silver <XAG=> fell to $12.73/12.83 an ounce from
$14.15/14.21 late in New York on Thursday.
Spot platinum <XPT=> ended at $1,365.00/1,385.00 an ounce
from its previous close of $1,481/1,501 an ounce. Spot
palladium <XPD=> fell to $281.00/289.00 an ounce from
$306.50/314.50 an ounce late in the U.S. market on Thursday.
(Editing by Jim Marshall)
