* Gold falls below $760 as firmer dollar hurts
* Recession fears overshadow demand for precious metals
* Platinum hit by sell-off in Tokyo, down more than 3 pct
(Updates prices, adds comments)
By Risa Maeda
TOKYO, Oct 22 (Reuters) - Gold fell below $760 for the first
time in a month 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 dollar jumped to a two-year high against a basket of
currencies as investors bet interest rates outside the United
States will be cut sharply to bolster global economic growth.
Fears of a global recession also caused a slump in oil prices
and stoked doubts over demand for gold and other precious metals.
Platinum fell more than 4 percent, dragged down by investor
selling to stem any further losses on Tokyo's yen-based platinum
futures.
"It's almost impossible to go against the current downturn.
Selling is inviting more selling," said Kaname Gokon, deputy
general manager at Okato Shoji Co in Tokyo, referring to a
sell-off in platinum futures on the Tokyo Commodity Exchange.
Platinum could test $750 per ounce, and that is also the next
support level for gold, he said.
Platinum <XPT=> traded at $852 an ounce as of 0736 GMT, down
3.8 percent from the notional close in New York of $885.50 and
reaching toward an almost four-year low near $830 marked last
week.
Gold <XAU=> stood at $757.10 an ounce, down 1.6 percent from
New York. The current level is down 18 percent from a peak of
$931 hit earlier this month.
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.
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=> to a
two-year low, down 1.8 percent on the day. []
The COMEX gold futures contract for December delivery <GCZ8>
traded at $760.1 per ounce, down 1 percent from the New York
settlement and adding to a fall of 2.8 percent on Tuesday.
The benchmark gold contract for August delivery on the Tokyo
Commodity Exchange <0#JAU:> fell 135 yen to 2,402 yen per gram.
The key August platinum futures contract <0#JPL:> fell 246
yen to 2,692 yen a gram, having lost more than 60 percent from a
peak for any benchmark in March.
One factor keeping investors away from platinum is a steep
fall in rhodium <RHOD-LON>, primarily used by auto makers in
catalytic converters, analysts said.
The metal 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, lost 2.8 percent to $174.50 an ounce. Silver <XAG=>
fell to $9.9 an ounce, down from $10.07 in New York.
Precious metals prices at 0744 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 758.50 -11.60 -1.51 -8.91
Spot Silver 9.92 -0.15 -1.49 -32.84
Spot Platinum 843.50 -42.00 -4.74 -44.51
Spot Palladium 174.50 -5.00 -2.79 -52.58
TOCOM Gold 2406.00 -131.00 -5.16 -21.37 82019
TOCOM Platinum 2703.00 -235.00 -8.00 -49.37 19571
TOCOM Silver 311.90 -6.30 -1.98 -42.35 1252
TOCOM Palladium 577.00 -25.00 -4.15 -57.29 321
Euro/Dollar 1.2841
Dollar/Yen 99.20
TOCOM prices in yen per gram, except for silver which is in yen
per 10 grams, spot prices in $ per ounce.
(Editing by Hugh Lawson)
