* Gold falls as firmer dollar hurts
* Recession fears overshadow demand for precious metals
(Updates prices, adds comments)
By Risa Maeda
TOKYO, Oct 22 (Reuters) - Gold fell about 1 percent on
Wednesday, extending the previous day's 3 percent decline as
firmness in the dollar overshadowed the precious metal's appeal
as an alternative investment.
The euro fell to a two-year low against the dollar on
Wednesday as investors bet that interest rates outside the United
States will be cut sharply to try to bolster global growth.
Fears of a global recession also caused a slump in oil prices
and stoked doubts over demand for gold and other precious metals.
Gold has been as vulnerable as oil and industrial metals,
which reflect market views on the global economy, Yuki Sonoda,
adviser at Daiichi Commodities Co in Tokyo.
"Gold is no longer special, and now moves in line with the
ups and downs of copper, lead and the stock markets," he said.
"I dare to say 'Even you, gold?'," he said, adding that there
isn't much chance of gold testing resistance at $900 per ounce in
the near future.
Spot gold <XAU=> stood at $762.60 an ounce as of 0513 GMT,
down 1 percent from New York's notional close of $770.10. The
current level is down 17 percent from a peak of $931 hit earlier
this month.
Underlining the tone, bullion holdings in the world's largest
gold-backed exchange-traded fund, the SPDR Gold Trust <GLD>, fell
to 755.64 tonnes, according to fund data as of Oct. 21, down from
a record of 770.64 tonnes on Oct. 13.
Uncertainty in global financial markets despite coordinated
interest rate cuts by central banks worldwide to address a credit
crunch had spurred demand for bullion as a safe-haven asset.
On Wednesday, the euro fell below $1.2900 <EUR=>, down 1.4
percent on the day. []
The COMEX gold futures contract for December delivery <GCZ8>
traded at $765.5 per ounce, down 0.3 percent from the New York
close and adding to a fall of 2.8 percent on Tuesday.
The benchmark August contract for gold on the Tokyo Commodity
Exchange <0#JAU:> fell 100 yen to 2,437 yen per gram.
Platinum <XPT=> traded at $890 an ounce, up from the notional
close in New York of $885.50 and recovering from an almost
four-year low near $830 per ounce marked last week. But it stayed
pressured due to concerns about a slump in demand from the
automobile sector.
Rhodium <RHOD-LON>, primarily used in catalytic converters,
has lost 80 percent of its value from this year's high marked in
June, suggesting some users may have sold the metal from their
stocks. Platinum is also used in catalysts to clean vehicle
exhaust fumes, and it could see similar selling at any time,
analysts said.
North American Palladium <PDL.TO> said on Tuesday it was
temporarily closing its Lac des Iles mine due to falling metals
prices. []
Palladium <XPD=>, the other metal used in catalytic
converters, was almost flat at $179 an ounce. Silver <XAG=> fell
to $10.0 an ounce, down from New York's notional close of $10.07.
Precious metals prices at 0415 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 762.05 -8.05 -1.05 -8.48
Spot Silver 10.01 -0.06 -0.60 -32.23
Spot Platinum 890.00 4.50 +0.51 -41.45
Spot Palladium 179.50 0.00 +0.00 -51.22
TOCOM Gold 2434.00 -103.00 -4.06 -20.46 41200
TOCOM Platinum 2863.00 -75.00 -2.55 -46.38 7822
TOCOM Silver 320.00 1.80 +0.57 -40.85 655
TOCOM Palladium 593.00 -9.00 -1.50 -56.11 147
Euro/Dollar 1.2907
Dollar/Yen 99.97
TOCOM prices in yen per gram, except for silver which is in yen
per 10 grams, spot prices in $ per ounce.
(Reporting by Risa Maeda; Editing by Hugh Lawson)
