* Gold off 1-week high, set for largest monthly fall since
1983
* Oil drops more than $1 on recession fears
* Nikkei slips 5 percent after BOJ cuts rates
(Updates prices, adds quotes)
By Lewa Pardomuan
SINGAPORE, Oct 31 (Reuters) - Gold slipped on Friday and
was on course for its biggest monthly decline since 1983, as
oil fell on recession fears, the dollar firmed and stocks
reversed gains, forcing investors to cash in to stem losses.
U.S. gross domestic product shrank at an annual rate of 0.3
percent for the third quarter, the sharpest fall in the world's
largest economy in seven years, spurring a broad commodities
sell-off on concerns over weakening fundamentals. The U.S.
dollar's rebound also weighed.
Platinum fell more than 5 percent as slowing economies
around the globe and the widespread credit crisis caused the
largest auto industry companies to slash full-year profit
targets, warn of job losses and push for speedy government
handouts.
Gold <XAU=> was at $731.75 an ounce, down $3.75 from New
York's notional close on Thursday, when it rose for a fourth
straight day to its strongest in a week at $776.30 an ounce.
"There's no fund buying in gold and platinum. Gold is very
bearish and going below $700 may be possible. Oil prices are
also down," said Yukuji Sonoda, precious metals analyst at
Daiichi Commodities in Tokyo.
Oil slipped for a second day on Friday and is set for its
biggest ever monthly loss as U.S. weak economic data rekindled
demand worries, which in theory reduces gold's appeal as a
hedge against inflation. []
"Investors are reluctant to buy too much, in case anything
happens. We've seen a little bit of physical selling around
$770," said Ronald Leung, director of Lee Cheong Gold Dealers
in Hong Kong, referring to this week's high.
Premiums for gold bars eased to $1.70 an ounce to the spot
London prices from $3 last week after holders cashed in on this
week's rally. <GOLD/ASIA1>
Gold has lost as much as 21 percent of its value this month
alone, and is down 12 percent this year.
It hit a 13-month low of $680.80 last week after investors
sold bullion to pay for margin calls. A recovery in stock
markets and firmer oil spurred a rebound in gold this week but
technical selling emerged after it failed to sustain Thursday's
high.
"Only if $775 is breached, then gold would be able to head
towards the next resistance at $806," said analyst Pradeep Unni
at Richcomm Global Services.
"Gains could be quick once $775 is scythed convincingly."
Gold, which has benefited from safe-haven buying, fears of
rising energy costs and uncertainties in the dollar's outlook,
was well below a recod high of $1,030.80 struck in March.
The Nikkei average <> fell 5 percent after the Bank of
Japan cut interest rates for the first time in seven years.
[]
The euro dipped to $1.2830 <EUR=>, making dollar-priced
gold more expensive for holders of other currencies.
Platinum <XPT=> was trading at $772.50 ounce, down $44.50
from New York's notional close. It has lost more than 60
percent of its value since hitting a lifetime high of $2,290 in
March, mainly due to worries about falling demand for
autocatalysts.
As the strong yen forced Japanese carmakers Mazda <7261.T> and
Mitsubishi <7211.T> to slash full-year targets, struggling U.S.
automakers were looking to obtain billions from the U.S.
government to help them survive. []
More than 60 percent of global platinum use goes to
autocatalysts to clean exhaust fumes.
New York gold futures <GCZ8> fell $5.3 an ounce to $733.2.
Precious metals prices at 0638 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 731.75 -3.75 -0.51 -12.12
Spot Silver 9.44 -0.22 -2.28 -36.09
Spot Platinum 772.50 -44.50 -5.45 -49.18
Spot Palladium 196.00 -1.00 -0.51 -46.74
TOCOM Gold 2299.00 -150.00 -6.12 -24.87
47483
TOCOM Platinum 2450.00 -300.00 -10.91 -54.11
16569
TOCOM Silver 291.10 -32.60 -10.07 -46.19
795
TOCOM Palladium 616.00 -41.00 -6.24 -54.40
658
Euro/Dollar 1.2742
Dollar/Yen 97.10
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Editing by Ben Tan)
