* Gold down nearly 1.5 pct as dollar rises on risk aversion
* Oil, equities slide amid fears over economic outlook
* Silver tumbles 5 pct after Friday's two-month high
(Updates prices)
By Jan Harvey
LONDON, Aug 17 (Reuters) - Gold slid towards $930 an ounce
in Europe on Monday as rising risk aversion boosted the dollar
and knocked oil prices and equity markets lower.
Meanwhile silver tumbled nearly 6 percent and was on track
for its biggest one-day fall since January, as its decline on
the back of falling gold prices was exacerbated by losses in
industrial commodities.
Spot gold <XAU=> hit a low of $929.70 an ounce and was bid
at $930.80 at 1507 GMT, against $945.85 late on Friday. U.S.
gold futures for December delivery <GCZ9> on the COMEX division
of the New York Mercantile Exchange fell $15.60 to $933.10.
Spot silver <XAG=> was bid at a two-week low of $13.82 an
ounce against $14.68 on Friday.
Silver hit a two-month high of $15.16 an ounce on Friday as
a softer dollar and optimism over the economic outlook lifted
precious metals early in the day. But prices fell in later trade
as the dollar firmed, and the fall continued into Monday.
"Gold and silver had a nice run, but there wasn't really
anything fundamental to sustain that," said Mitsubishi Corp
precious metals strategist Tom Kendall.
"The dollar turned around, and the physical markets are
still pretty quiet," he added. "They were bid up by funds and
speculators, but that ran out of steam."
The dollar firmed versus a basket of major currencies <.DXY>
as risk aversion rose in the wider markets, prompting buying of
the U.S. unit as a haven. []
A firmer U.S. currency usually weighs on gold, as it makes
dollar-priced assets such as bullion more expensive for holders
of other currencies and dents interest in the precious metal as
an alternative asset.
Physical demand for gold also remained weak, with the
largest bullion-backed exchange-traded fund, the SPDR Gold
Trust, saying it saw no new inflows on Friday. []
"Physical demand is not strong enough to absorb the
selling," senior Commerzbank trader Michael Kempinski said. "We
think we will see more (demand) at $925."
COMMODITIES SLIP
Caution over the outlook for the global economy also
battered stock markets, with European shares tumbling to a
two-week low on Monday after retreating on Friday. U.S. stocks
also fell at the open. [] []
World stocks fell nearly 2 percent, with the benchmark MSCI
world equity index <.MIWD00000PUS> heading for its biggest
one-day loss since early July. The CBOE VIX index <.VIX>, seen
as Wall Street's 'fear gauge', jumped 15 percent. []
Stock market losses and the stronger dollar knocked
bellwether commodity oil, which slipped to its lowest level this
month below $66 a barrel. []
Base metals also slipped, pressuring silver, which as well
as being bought as an investment metal like gold is also widely
used in industries such as electronics manufacturing. []
"Silver was the big loser in the latest commodity sell-off,"
Standard Bank analyst Walter de Wet said in a note.
"The metal has found good buying support from copper.
However, with the red metal testing $6,000 again this morning
and gold falling below $940, silver buying interest is limited."
In supply news, the world's number five gold miner, Harmony
Gold Mining Co <HARJ.J>, announced its first dividend in five
years and said output rose 1 percent in the first quarter.
[]
The world's biggest primary silver producer, Fresnillo
<FRES.L>, said its silver production is expected to rise 2-3
percent in 2010. []
Elsewhere platinum <XPT=> was at $1,212.50 an ounce, down
more than 3 percent from $1,254.50 on Friday, while palladium
<XPD=> also fell more than 3 percent t0 $263.50 versus $273.50.
(Additional reporting by Michael Taylor; Editing by Peter
Blackburn)
