* Gold pressured as dollar rallies on U.S. stimulus hopes
* India gold import tumbles, Abu Dhabi Dec sales fall
* Platinum up on hopes of better auto demand after funding
(Recasts, updates with quotes, closing prices, adds NEW YORK
to dateline)
By Frank Tang and Jan Harvey
NEW YORK/LONDON, Jan 5 (Reuters) - Gold tumbled on Monday,
briefly breaking below the $850-an-ounce level as investors
took profits on the back of a dollar rally and signs of slowing
physical demand in India, the world's top bullion consumer.
Other precious metals tumbled in gold's wake, with silver
falling as much as 8 percent and palladium as much as 6
percent. However, platinum turned higher on expectations that
automakers could rebound after receiving emergency funding from
the U.S. government.
Spot gold <XAU=> was at $858.45 an ounce at 2:27 p.m. EST
(1927 GMT), down 1.7 percent from the last trade on Friday,
after hitting a 10-day low of $843.50.
U.S. gold futures for February delivery <GCG9> settled down
$21.70, or 2.5 percent, to $857.80 an ounce on the COMEX
division of the New York Mercantile Exchange.
The dollar firmed on Monday, underpinned by news of a
planned U.S. stimulus package and increased expectations of
interest rate cuts by major central banks. []
"Gold's move in the last couple of days is almost entirely
due to the strength of the dollar," said UBS commodity
strategist John Reade. "The number one, front center driver of
the dollar gold price is where euro-dollar is going."
The precious metal had found good support in early trade as
oil prices rose nearly 3 percent after an Iranian military
commander called for an oil boycott over Israel's offensive in
the Gaza Strip. []
Oil prices turned higher, up about $2 to above $48 per
barrel, lifting bullion off its session lows
Gold usually moves in line with oil prices, both because
firmer crude boosts interest in the precious metal as a hedge
against oil-led inflation and increases the appeal of
commodities as an asset class.
JEWELRY BUYING SOFT
Traders said that news of sharply lower bullion imports by
India, Turkey and the Middle East has taken a toll on momentum
in the market.
Gold imports by India, the world's largest buyer of the
metal, fell 81 percent in December, and they were down 47
percent in 2008 as high prices and a slowing economy dented
demand.
Demand for gold jewelry has been hit by the higher prices.
Sales in Abu Dhabi fell 40 percent in December from a month
before, the emirate's industry group said. []
"It really confirmed what we have been seeing as anecdotal
evidence from physical traders that the demand in emerging
markets has been rationed effectively due to high prices," said
Tom Pawlicki, precious metals and energy analyst at MF Global.
For a graphic showing India's monthly gold imports,
double-click on:
https://customers.reuters.com/d/graphics/IN_GLDMTH0109.gif
Among other precious metals, silver slipped in line with
gold to $11.20 an ounce, down 2.8 percent from its previous
session close of $11.52.
Platinum turned higher after General Motors said the drop
in its December U.S. sales did not exceed Wall Street
estimates. It was GM's first monthly results since the U.S.
government agreed to provide the struggling automaker with up
to $13.4 billion in emergency funding. []
Automakers are responsible for around 50 percent of global
platinum and palladium demand.
Platinum <XPT=> was quoted at $948.00 an ounce, up 0.4
percent from its last finish of $944, while palladium <XPD=>
traded at $183.50 an ounce, 3.4 percent lower than its previous
close of $190.
(Additional reporting by Julie Crust; editing by Jim
Marshall)
