* Gold falls 1 pct to track weaker equities and oil
* Lower bullion attracts physical buying
* Oil below $60 before bouncing, Nikkei down over 4
percent
(Updates prices)
By Lewa Pardomuan
SINGAPORE, Nov 7 (Reuters) - Gold dropped as much as 1
percent on Friday, having posted its biggest daily percentage
increase in more than a month this week, as equities extended
losses on escalating worries about a global recession.
But lower prices attracted buying from jewellers and retail
investors in Asia, which could stem more losses after falling
equities drove funds to cash in to cover margin calls. Gold was
nearly 30 percent below a record high above $1,000 hit in
March.
Gold <XAU=> was trading at $731.95 an ounce, down $1.00 an
ounce from New York's notional close on Thursday, when it moved
in a $19 range to hit a session high of $760 an ounce before
retreating.
"We are now at a lower range. I believe there's a lot of
demand from short-term speculators around the $700 to $720
level. They might be accumulating (gold) slowly," said William
Kwan, bullion director of Gold Capital Management.
"A lot of people are still buying gold coins. Retail
investors are very happy to buy gold at these levels," he said.
Gold has gained as much as 6.2 percent this week to hit a
session high of $768. It was still down from a two-month high
of $931 hit in October but significantly higher than a 13-month
low of $680.80 also struck last month.
In the physical front, premiums for gold bars were steady
between $1.5 to $2 an ounce to the spot London prices in
Singapore. Premiums were also stable in Hong Kong at betwen $2
and $3 an ounce. <GOLD/ASIA1>.
"It's cooling off a little but physical demand has been
very good in the past two weeks. Demand is so good in Thailand
that we've seen streams of people buying gold at jewellery
shops in Chinatown," said a dealer in Singapore.
"We also heard many people crossed over to Thailand from
Cambodia, Laos and Vietnam to buy jewellery," he said.
Despite buying on dips from consumers, gold was struggling
to revisit March's record at $1,030.80, partly blamed on a
slump in the equities markets that forced investors to cash in
to make good losses.
The Nikkei average slid 4.4 percent on Friday, with
exporters tumbling on a firmer Japanese yen and fears of a
deepening economic downturn. []
Recession fears sent oil prices to below $60 a barrel for
the first time in 20 months on Friday before rebounding. []
In theory, weaker oil prices reduced gold's appeal as a
hedge against inflation.
"Gold has been moving in a narrow range of $725 to $750
because stock prices fluctuate. There's a rush of actual buying
by many Japanese investors," said Yukuji Sonoda, precious
metals analyst at Daiichi Commodities in Tokyo.
"Buying is very very strong in Japan at this moment," he
said.
In currencies, the euro and sterling fell due to a drop in
risk appetite and as investors braced for the European Central
Bank and the Bank of England to lower interest rates further.
[]
Platinum <XPT=> was trading at $816.00 ounce, down $10.50
from New York's notional close on Thursday.
New York gold futures <GCZ8> fell $0.2 an ounce to $732.8.
Precious metals prices at 0240 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 731.95 -1.00 -0.14 -12.10
Spot Silver 10.06 0.10 +1.00 -31.89
Spot Platinum 829.00 2.50 +0.30 -45.46
Spot Palladium 215.00 0.00 +0.00 -41.58
TOCOM Gold 2274.00 -68.00 -2.90 -25.69
24882
TOCOM Platinum 2577.00 -163.00 -5.95 -51.73
9508
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)
