* Dollar, yen rally, reflecting risk aversion
* Traders eye U.S. data, central bank rate cuts
* US Nov car sales tumble 37 pct, weighing on PGMs
(Recasts, updates with quotes, closing prices, market
activity, adds NEW YORK to dateline)
By Frank Tang and Jan Harvey
NEW YORK/LONDON, Dec 3 (Reuters) - Gold ended nearly 2
percent lower on Wednesday on the back of a dollar rise as the
market awaited a spate of economic indicators later this week
to give fresh impetus.
"It's really has been a dollar play. And I am surprised
that with the yields in bonds declining so much, there hasn't
been more activity in gold," said Rob Kurzatkowski, futures
analyst at optionsXpress.
"We are going into an area with pretty stout support. I
think this recent sell-off is going to moderate here," he
added.
Spot gold <XAU=> was at $768.25 at 2:05 p.m. EST (1905
GMT), down 1.7 percent from Tuesday's close of $781.50 an ounce
in New York late on Tuesday.
U.S. gold futures for February delivery <GCG9> settled down
$12.80, or 1.6 percent, at $770.50 an ounce on the COMEX
division of the New York Mercantile Exchange.
U.S. Treasuries prices initially fell as investors pulled
back from a recent surge in prices that pushed yields down to
the lowest in more than 50 years.
Gold is sometimes seen as an alternative to the U.S.
government debt as a safe haven in times of uncertainty.
Volatile equity markets were also feeding through into
gold, traders said. U.S. stocks traded slightly higher in late
trade after dropping sharply in early sessions. []
The dollar and yen rallied against major currencies,
reflecting heightened risk aversion as investors cut back on
investments in higher-yielding assets. []
"As we come towards the year end there is a huge need for
dollars to square books, so the dollar will stay bid," said
Calyon metals analyst Robin Bhar.
Gold is also bought as an alternative to the dollar and
typically moves in the opposite direction to the U.S.
currency.
Physical off-take of gold is also slowing, traders said. In
India, the world's largest bullion market, domestic gold buying
declined as well-stocked traders awaited further price falls.
[]
Traders are awaiting a spate of interest rate decisions,
including that of the ECB on Thursday, and key U.S. nonfarm payrolls numbers on Friday to give fresh impetus to the
markets.
Among other precious metals, spot silver <XAG=> tracked
gold lower to close at $9.56, a tad higher than its Tuesday
close of $9.54.
CAR SALES TUMBLE
Spot platinum <XPT=> was at $790.50 an ounce, down 0.7
percent from its previous finish of $796.
Data released on Tuesday showed U.S. car sales tumbled
nearly 37 percent in November, the 13th consecutive month of
falls, to their lowest level since 1982.
However, with platinum having already fallen two-thirds
from the highs it hit in March and much of the bad news already
priced in, the market showed little reaction to the news.
"The platinum group metals market has come to expect the
worse, and much of this bearish news has been priced in
already," Standard Bank analyst Walter de Wet said.
Meanwhile, palladium <XPD=> closed at $171.00, 1.2 percent
higher than Tuesday's late quote of $169.
A Reuters survey showed platinum, palladium and silver are
expected to record sharp price falls in 2009 as demand sags in
line with economic growth. []
(Editing by Christian Wiessner)
