* Gold bounces off 1.6 pct drop on firm euro, physical
buying
* Nikkei ends 1.3 pct lower
* Oil steadies above $59 a barrel
(Updates prices, China's demand, quotes)
By Lewa Pardomuan
SINGAPORE, Nov 12 (Reuters) - Gold regained some footing on
Wednesday, after dropping more than 1 percent in New York, as
the euro inched up against the U.S. dollar and bargain hunting
resurfaced.
China's demand for gold as an investment hit 38.4 tonnes in
the first nine months of in 2008, already exceeding total
retail investment demand of 24 tonnes in 2007, a senior
industry official said. []
Gold <XAU=> was trading at $736.50 an ounce, up $5.75 an
ounce from New York's notional close on Tuesday, when a firmer
dollar, worries about a global recession and weakness in other
commodities sparked selling from speculators.
Investors in Japan have been active buyers this week,
partly due to a stronger yen against the U.S. currency, which
makes dollar-priced gold bars cheaper to buy. Dealers also
noted buying from jewellers in India, the world's largest
consumer.
"I think we still have to see how the dollar behaves. If it
continues to stay strong, then gold will be under pressure. I
guess gold is still trading in the $720 to $770 range," said a
dealer in Hong Kong.
But demand from jewellers and investors was likely to offer
support for bullion, said the dealer, adding that premiums for
gold bars were steady at this year's high of $3 an ounce to the
spot London prices in Hong Kong. <GOLD/ASIA1>.
Gold has bounced more than 7 percent since falling to a
13-month low of $680.80 in October and is struggling to sustain
the uptrend due to a deteriorating global economy and weak
equities, which drove investors to cash in to cover losses.
"Buying from private investors in Japan supports gold.
Funds are getting out of the market but $700 is a big support,"
said Yukuji Sonoda, analyst at Daiichi Commodities in Tokyo,
referring to a level last seen in September 2007.
"There's a very strong actual demand," he said. "While the
Japanese are buying ingots, the Indians are buying jewellery
products."
Dealers said physical buyers would buy on dips and demand
in India was picking up during the wedding season, which starts
in October and lasts through early 2009. []
Gold jewellery forms an important part of a dowry in India
as parents wish to give gold to their daughters to ensure
financial security. Bullion is well below a record high of
$1,030.80 struck in March.
In the currency market, the dollar fell as low as 97.15
<JPY=> while the euro inched up to $1.2548 <EUR=> after
touching a two-week low of $1.2477 ahead of a G20 summit in
Washington this weekend. []
The Nikkei ended 1.3 percent lower on worries about the
health of the global economy. []
Oil steadied above $59 a barrel on Wednesday, after
settling below $60 for the first time in 20 months the previous
day, as fears of the spreading economic downturn deepened
demand worries. []
Platinum <XPT=> was trading at $833.00 ounce, up $20.50
from New York's notional close on Tuesday.
New York gold futures <GCZ8> added $4.8 an ounce to
$737.6.
Precious metals prices at 0641 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 736.50 5.75 +0.79 -11.55
Spot Silver 9.81 0.07 +0.72 -33.58
Spot Platinum 833.00 20.50 +2.52 -45.20
Spot Palladium 215.00 3.00 +1.42 -41.58
TOCOM Gold 2322.00 -19.00 -0.81 -24.12
31856
TOCOM Platinum 2652.00 45.00 +1.73 -50.33
14363
TOCOM Silver 309.50 -9.10 -2.86 -42.79
349
TOCOM Palladium 694.00 -17.00 -2.39 -48.63
333
Euro/Dollar 1.2612
Dollar/Yen 97.76
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Editing by Clarence Fernandez)
