* Dollar firms to 2-year high on global economic woes
* Oil prices slide below $68/bbl after U.S. stocks data
* Platinum tumbles 6 percent on dollar, demand fears
(Adds comment, updates prices)
By Jan Harvey
LONDON, Oct 22 (Reuters) - Gold and platinum tumbled on
Wednesday, reflecting a slide across commodity prices, as the
dollar firmed to a two-year high against the euro.
Spot gold <XAU=> fell more than 3 percent to a session low
of $743.45 an ounce, before recovering to trade at
$752.45/754.95 at 1457 GMT. Late in New York on Tuesday it was
quoted at $770.10 an ounce.
Gold is caught up in an overall sell-off of commodities,
analysts said, with oil, base metals, sugar and grains all
trending lower.
"This is quite heavily a dollar story," Stephen Briggs,
commodities strategist at RBS Global Banking & Markets, said.
"But in addition, investors are just selling everything.
Gold is not immune from that, not least because it is a
constituent of most of the indices."
Oil slipped sharply, falling to a 16-month low below $68 a
barrel, as traders feared the gloomy outlook for the global
economy could translate into lower demand. []
The release of U.S. inventory data which showed a fourth
consecutive week of gains in crude stocks added pressure to oil,
temporarily knocking prices more than $4 to below $68 a barrel.
The market is now awaiting the outcome of Friday's emergency
meeting of oil cartel OPEC, which is expected to announce a cut
in production quotas. Such a move could boost the oil market,
and consequently gold, analysts say.
Gold's other main external driver, the dollar, has
strengthened to a two-year high against a basket of currencies,
as the dire outlook for the global economy prompted investors to
liquidate riskier assets in favour of the currency.
A firmer dollar tends to weigh on gold, as it dents the
precious metal's appeal as an alternative investment, and makes
it more expensive for holders of other currencies.
[]
PLATINUM TUMBLES
Platinum tumbled more than 6 percent as the stronger dollar
added to pressure on the metal, which has been weighed down by
fears over falling demand from carmakers.
The automotive sector, which accounts for around half of all
platinum demand, has been hit hard by the prospect of recession.
A spate of carmakers in the U.S., Europe and Asia have reported
falling sales.
A newspaper reported on Wednesday that Toyota Motor Corp's
<7203.T> annual profit will likely halve in the year to next
March, while General Motors <GM.N> was separately reported to be
seeking outside investment. []
Nissan Motor Corp <7201.T> said on Tuesday it would cut
production in Japan, Britain and Spain in response to falling
demand. []
Spot platinum <XPT=> slipped as low as $831 an ounce, before
recovering to trade at $851.50/871.50, against $885.50 an ounce
late in New York on Tuesday.
Its sister metal palladium <XPD=> fared slightly better,
slipping to $175/183 from $179.50 an ounce.
"There are still some people out there who think (palladium)
has some potential and is cheap," one Germany-based trader said.
"It is easier to try to invest in a $180/oz commodity than
in a $860/oz commodity, and probably they think there will be
more substitution of platinum by palladium."
Among other precious metals, silver <XAG=> was trading at
$9.84/9.94 an ounce against $10.07.
(Reporting by Jan Harvey; editing by Sue Thomas)
