* Gold edges up in choppy trade, off 1-month low
* Nikkei up over 2 percent, oil rises more than $3
* U.S. dollar bounces from lows against euro
(Updates prices, adds quotes)
By Lewa Pardomuan
SINGAPORE, Oct 17 (Reuters) - Gold edged up in volatile
trade on Friday, recovering from a 6-percent drop in New York,
after oil rose more than $3 and a rebound in equities eased
worries of a global recession, at least for now.
A fall in the dollar against the euro restored gold's
safe-haven appeal after a recent sell-off in equities drove
speculators to sell bullion to cover losses. Firmer gold
plucked other precious metals from their multi-year lows.
Gold <XAU=> was trading at $807.25 an ounce, up $2.75 from
New York's notional close, having hit an intraday low of
$795.25, not far from a 1-month low of $783.80 hit on Thursday
when funds dumped commodities amid uncertainties in the
financial markets.
"Obviously, the price action is telling you that there are
sellers. One of the factors causing gold to be sold is people
are selling gold in order to get cash, the U.S. dollar," said
David Moore, commodities analyst at Commonwealth Bank of
Australia.
"But I think they still create interest in gold as a
safe-have investment as well. It's just a number of different
forces play on the gold market at the moment."
Gold's volatility has scared off jewellers and some
investors. It rallied to a two-month high of $931 last Friday
on a weak dollar before tumbling all the way to $823.50 on the
same day as investors sought cash to cover margin calls.
Gold was well below a record of $1,030.80 hit in March.
Bargain hunting by private investors in Japan and buybacks
by producers lifted gold prices, but jewellers were on the
sidelines and the charts also indicated bullion could still hit
the lows again, said Yukuji Sonoda, an analyst at Daiichi
Commodities.
"In Japan, jewellery demand is tremendously poor. So many
scraps have been returned to fabricators. We reached $750 last
month, so it may be possible for us to touch that level again,"
he said.
In other markets, Japan's Nikkei average <> ended up
2.8 percent and gains in equities helped oil rise more than $3
after hitting a 15-month low. []
The dollar slipped against the euro as safety buying of the
currency eased, with fears over the global financial sector
slightly blunted. []
"I am bullish on gold because, in the end, as the global
economic recession deepens, governments will find the only way
out of this mess is to print more money," said Jeffrey Nichols,
managing director of American Precious Metals Advisors.
"In other words, to inflate. But a deeper downturn means
that policy makers will need even more aggressive monetary
easing and fiscal spending to breathe life back into the sick
economy -- and governments will be even deeper in the hole."
Government steps to shore up the banking system and
unfreeze credit markets showed some signs of progress on
Thursday, but grim news from major economies reinforced fears
of recession and hammered global markets. []
Platinum <XPT=> was steady at $885.00 ounce, up $0.06 an
ounce from New York's notional close on a technical rebound. It
had plummeted to $831.50, it weakest since December 2004, on
fears of a global recession.
New York gold futures <GCZ8> rose $4.7 an ounce to $809.2.
Precious metals prices at 0547 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 807.25 2.75 +0.34 -3.06
Spot Silver 9.71 0.08 +0.83 -34.26
Spot Platinum 885.00 0.50 +0.06 -41.78
Spot Palladium 173.00 2.00 +1.17 -52.99
TOCOM Gold 2628.00 -62.00 -2.30 -14.12
35793
TOCOM Platinum 2880.00 -70.00 -2.37 -46.06
13815
TOCOM Silver 313.70 -2.80 -0.88 -42.01
703
TOCOM Palladium 586.00 -29.00 -4.72 -56.62
391
Euro/Dollar 1.3464
Dollar/Yen 101.54
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Editing by Clarence Fernandez)
