* Tumbling Indian imports add selling pressure
* Strong investment demand to buoy gold
* Slumping auto sales weigh on platinum
(Recasts, updates with quotes, closing prices, adds NEW YORK
to dateline)
By Frank Tang and Pratima Desai
NEW YORK/LONDON, Feb 2 (Reuters) - Gold dropped more than 2
percent on Monday, holding just above $900 an ounce as
short-term investors took profits on signs of weak jewelry
demand and selling related to technical resistance.
Analysts, however, say prices will be underpinned by
investors looking for a safe place to park their assets, away
from the turbulence in equity markets.
"Gold is currently working as a 'fear indicator', signaling
risk aversion of market participants," said Eugen Weinberg,
commodities analyst at Commerzbank.
"Strong investment demand should help gold prices to stay
around $900 in coming days ... Over the last few weeks the gold
price has increased despite a significantly stronger dollar and
news about a massive fall in Indian gold imports."
Spot gold <XAU=> traded $904.10 an ounce at 2:17 p.m. EST
(1917 GMT), down 2.4 percent from the last trade $927.00 on
Friday in New York.
U.S. gold futures for April delivery <GCJ9> settled down
$21.20, or 2.3 percent, at $907.20 an ounce on the COMEX
division of the New York Mercantile Exchange.
Traders said profit taking after gold's recent run higher
was behind lower prices on Monday.
India's gold imports plunged more than 90 percent to just
1.2 tonnes in January from 18 tonnes in the same month last
year. []
India is the world's largest gold consumer and its jewelry
sector accounts for almost 70 percent of global bullion
demand.
A stronger U.S. currency would normally weigh on gold as it
makes the precious metal, priced in dollars, more expensive for
holders of other currencies. []
SCALE OF INTEREST
But over the last few days both the dollar and gold have
moved in the same direction. Data showing falling consumer
spending and income in the United States did little to dampen
investor interest in the dollar. []
"People are looking at the longer-term prospect. Everything
is in trouble now, and who knows what's going to happen to the
dollar in the longer run. So, gold is perceived to be safer,"
said one precious metals broker in New York.
The scale of investor interest can be seen in the world's
largest gold-backed exchange-traded fund (ETF), the SPDR Gold
Trust <GLD>, which as of Jan. 29 held a record 843.59 tonnes of
gold, up 10.71 tonnes from Jan. 27.
Whether gold can reach its record high of $1,030.80 an
ounce, hit last March, is still under debate and opinions, as
seen in a recent Reuters survey, are varied. []
The survey of more than 50 precious metals analysts showed
a range of between $650 and $1,150 an ounce for this year.
For platinum, the range for this year is $750 to $1200. The
metal, used in autocatalysts to help clean car emissions, is
down nearly 60 percent since a record high of $2,290 an ounce
March.
Recession and slumping car sales around the world and
expectations of worse to come for the auto sector will keep
prices low, analysts say.
Spot platinum <XPT=> traded at $968.50 an ounce, down 1.7
percent from its last finish of $985.
Silver <XAG=> was at $12.38 an ounce, down 2 percent from
its previous close of $12.63, and palladium <XPD=> was at
$195.00 an ounce, up 2.1 percent from its previous close $191
on Friday.
(Editing by Christian Wiessner)
