* Worries over auto sector demand for PGMs spark sell-off
* Gold slips nearly 2 percent to below $750/oz
* Dollar strengthens to one-year high vs euro
(Recasts, changes dateline, pvs SINGAPORE)
By Jan Harvey
LONDON, Sept 11 (Reuters) - Platinum slipped more than 4
percent and palladium 5 percent in Europe on Thursday as fears
over the outlook for automotive sector demand sparked selling.
The dollar's rise to a one-year high against the euro is
undermining interest in all the precious metals, analysts said.
Spot platinum <XPT=> fell to a session low of $1,126 an
ounce, its weakest level since Jan 2007, before recovering to
trade at $1,145.00/1,155.00 an ounce at 0905 GMT against
$1,176.00/1,196.00 late in New York on Wednesday.
"Demand has come to the forefront rather than supply, which
the market was all about in the first half of this year," said
Mitsubishi precious metals strategist Tom Kendall. "People's
attention just keeps getting drawn back to... the auto industry."
"There has been a lot more liquidation through TOCOM this
morning and that is what is really pushing platinum down so far
today," he added.
Spot palladium <XPD=> also slipped to a fresh three-year low
of $212.50 an ounce, before recovering to trade at
$214.00/219.00 against $224.00/232.00.
The automotive sector has been suffering the effects of the
recent global economic slowdown. Ford Canada <F.N> said on
Wednesday it is cutting another 500 jobs in Ontario as U.S.
sales continue to deteriorate. []
A spate of disappointing reports from carmakers including
General Motors <GM.N>, Nissan Motor <7201.T> and BMW <BMWG.DE>,
sparked a sell-off in platinum group metals in early August.
UBS analyst John Reade said in a note that "unprecedented"
over-the-counter liquidation in platinum, plus selling on TOCOM,
Nymex and by exchange-traded funds, has seen 2-3 million ounces
of the metal sold since early July.
"Contrast that with annual supply of about 8 million ounces
and a forecast deficit of about 500,000 ounces, and the price
move becomes more understandable," he said.
Fears over demand have pushed platinum down more than 50
percent from the highs of $2,290 an ounce it hit in March this
year, after news of an electricity shortage in South Africa,
which produces 80 percent of global supply of the metal.
GOLD FALLS
Gold also slipped nearly 2 percent to a fresh 11-month low
as firm physical demand for the metal failed to balance the
effects of the stronger dollar.
Spot gold <XAU=> fell to a session low of $738.50, before
recovering to trade at $743.60/744.80 an ounce from
$752.55/754.15 in New York on Wednesday.
The U.S. currency rose to a one-year high against the euro
on Wednesday, as investors fretted over the economic outlook
outside the United States. []
A stronger dollar typically pressures gold, which is often
bought as a hedge against weakness in the currency.
Investor interest in gold has been shaken by the firming
dollar. The world's largest gold-backed exchange-traded fund,
SPDR Gold Trust, said its holdings fell nearly 3 percent on
Wednesday to just over 614 tonnes, a three-month low.
[]
"As long as the U.S. dollar strengthens, gold and other
precious metals are most likely to remain under selling
pressure," said investment bank Dresdner Kleinwort.
"In this context, among the U.S. economic data released
today the trade balance might be in the spotlight."
U.S. international trade data for July and import/export
prices for August are due for release at 1230 GMT.
Among other precious metals, spot silver <XAG=> slipped to
$10.68/10.73 from $10.75/10.83.
(Reporting by Jan Harvey; Editing by Peter Blackburn)
