* Gold bounces higher after touching another 11-month low
* Platinum strikes lowest level since January 2007
(Updates prices, adds quotes)
By Lewa Pardomuan
SINGAPORE, Sept 11 (Reuters) - Gold regained strength on
Thursday as more physical buyers resurfaced after prices struck
another 11-month low, but the U.S. dollar's strength against
the euro threatened to cap gains.
Investors, who propelled gold to a lifetime high of
$1,030.80 in March on inflation fears and a struggling dollar,
are ditching their bullion holdings as the U.S. currency stages
a dramatic rebound. Other precious metals have slumped to
multi-month lows.
Gold <XAU=> rose 0.2 percent to $754.40/755.60 an ounce by
0701 GMT, rebounding from an intraday low of $748.60 an ounce.
It fell to $752.55/754.15 in New York on Wednesday, down 6
percent in two days, the sharpest two-day loss since March.
"We are getting some buying ahead of the festive season.
Other than that, we still see some paper gold trading as well,
but it's quieter than yesterday," said Beh Hsia Wah, a dealer
at United Overseas Bank in Singapore.
The dollar hit another a new one-year high against the euro
on Thursday as investors refocused on sluggish economic
prospects outside the United States, although worries about the
U.S. financial system hung over the market.[]
Physical dealers reported a shortage in gold bars in
Singapore and Hong Kong as jewellers stepped up purchases ahead
of religious festivals in India, the Middle East and Southeast
Asia.
Many weddings take place during the festive season in India
which peaks in October with Diwali, the Hindu festival of
lights. Gold jewellery forms an important part of dowry as
parents prefer to give gold to their daughters for financial
security.
"Investor interest has diminished because of the movement
of the U.S. dollar and the oil price," said David Moore,
analyst at Commonwealth Bank of Australia in Sydney.
"There's some evidence of increasing fabrication demand for
gold at this level, so that might be supportive. But at the
moment, of course the shift in investment flow is overwhelming
that influence," he said.
A stronger dollar reduce gold's appeal as an alternative
investment. The bullion holdings of SPDR Gold Trust <GLD.P>,
the world's largest gold-backed exchange-traded fund, dropped
to their lowestlevel in three months around 614 tonnes
<XAUEXT-NYS-TT>.
Oil <CLc1> climbed more than $1 to near $104 a barrel on
Thursday, having fallen the previous day as a jump in the U.S.
dollar offset a surprise OPEC output cut. []
"I think the market is a bit panicky at the moment because
it has broken all the major supports. People are very cautious
about oil prices, the U.S. dollar and everything," said Ellison
Chu, manager of precious metals at Standard Bank Asia in Hong
Kong.
The benchmark gold contract on the Tokyo Commodity
Exchange, August 2009 <JAUc6>, fell 71 yen per gram lower at
2,619 yen.
Spot platinum <XPT=> fell to $1,161.50/1,181.50 an ounce
from $1,176.00/1,196.00 late in New York. It hit an intraday
low of $1,150.50 an ounce, its weakest since January 2007 and
nearly half the record high it touched in March.
Platinum, mainly used in autocatalysts, has been hit by
heavy selling due to a slowing U.S. economy and poor car sales
in the United States, Japan and China.
Precious metals prices at 0712 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 754.80 2.80 +0.37 -9.36
Spot Silver 10.80 0.17 +1.60 -26.88
Spot Platinum 1161.50 -8.50 -0.73 -23.59
Spot Palladium 223.00 -2.00 -0.89 -39.40
TOCOM Gold 2613.00 -77.00 -2.86 -14.61
58988
TOCOM Platinum 3943.00 -201.00 -4.85 -26.15
22693
TOCOM Silver 376.20 -15.90 -4.06 -30.46
1252
TOCOM Palladium 790.00 0.00 +0.00 -41.52
1747
Euro/Dollar 1.3939
Dollar/Yen 107.09
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Editing by Ben Tan)
