* ECB cuts rates by 75 bps, BoE by 1 percentage point
* Oil slides as demand woes outweigh U.S. stockpile dip
* ZKB platinum ETF holdings rise 27 pct
(Updates prices, adds comment)
LONDON, Dec 4 (Reuters) - Gold steadied on Thursday, making
up the ground it lost earlier after a sharp European Central
Bank rate cut, as the euro erased losses against the dollar.
The precious metal fell earlier in line with the softer euro
after the ECB cut interest rates by a larger-than-expected 75
basis points.
However, a turnaround in the single currency later in the
session has encouraged buying of gold as a hedge against dollar
weakness. []
Spot gold <XAU=> was quoted at $772.45/774.45 an ounce at
1553 GMT from $772.60 an ounce in New York late on Wednesday.
"Gold is mirroring the directions in euro-dollar after the
ECB rate cuts," said Pradeep Unni, a senior analyst at Richcomm
Global Services.
"The dollar also seems to be discounting the gains ahead of
the non-farm payrolls data scheduled tomorrow," he added.
The ECB cut its benchmark rate by three-quarters of a point
to 2.50 percent, its lowest level in nearly 2-1/2 years, as
inflation plummeted and the euro zone economy sank deeper into
recession. []
This followed a full percentage point cut to 2 percent by
the Bank of England. []
Gold initially softened a touch on the news, but
expectations of rate cuts prevented a larger reaction.
"The ECB cut by more than was originally expected, but
overall a lot of it was already priced in," BNP Paribas analyst
Michael Widmer said.
In the slightly longer term, rate cuts are likely to benefit
gold if they increase liquidity, analysts said.
"The recent sharp dip in inflation pushed up real interest
rates, exerting pressure on gold," Commerzbank said in a note.
"Generous rate cuts are therefore good for gold as they again
reduce the opportunity costs involved in holding it."
Crude prices, which had also weighed on gold in earlier
trade, also retraced some losses as the dollar weakened and
equities turned positive.
Traders turned their attention to U.S. non-farm payrolls
data due on Friday for clues as to the next direction of the
currency markets, and therefore of gold.
Physical demand eased in some of gold's traditional markets
as traders awaited price falls. Indian buyers looked for prices
of around $740 an ounce before making purchases, dealers
reported. []
PLATINUM STEADIES
Platinum prices were steady, but held only a touch over
those of gold, as traders worried about the impact of the
recession on carmakers, who account for around half of all
demand for the white metal.
"Concerns over industrial demand for the metals -
particularly from the auto sector - will continue to keep prices
under pressure for the time being," Standard Bank analyst Leon
Westgate said in a note.
"In the background however, mounting production cutbacks and
mine closures suggest that there may be a very rapid price
recovery once the first signs of increased metals demand start
to emerge," he added.
Spot platinum <XPT=> was quoted at $789/809 an ounce, from
$793.50 in New York trade late on Wednesday. Its sister metal
palladium was at $170.50/178.50 an ounce against $171.
Zurich Cantonal Bank said holdings of its platinum-backed
exchange-traded fund <ZPLA.S> rose 27 percent to 105,200 ounces
on Dec 1, from 83,000 ounces in September. Its palladium-backed
ETF saw inflows of 12 percent in the same period. []
Among other precious metals, spot silver <XAG=> slipped to
$9.46/9.54 an ounce from $9.63.
(Reporting by Jan Harvey; editing by William Hardy)
