* European stocks fall more than 7 pct on recession fears
* Wall St opens sharply lower, recovers
* Oil, metals, agricultural commodities sell off
(Updates throughout, adds comment)
By Jan Harvey
LONDON, Oct 10 (Reuters) - Gold slipped nearly 2 percent on
Friday after earlier touching a 2-1/2 month high as a slide in
the global equity markets sparked a broad-based commodities
sell-off.
Platinum, palladium and silver all tumbled, reflecting
losses in crude oil, industrial metals, sugar and grains, as
European and U.S. stock markets posted huge losses.
Spot gold <XAU=> was quoted at $897.00/901.00 an ounce at
1436 GMT against $911.50 an ounce late in New York on Thursday.
Earlier it touched a session low of $887.95 an ounce.
Gold has been underpinned in recent weeks by interest in
bullion as a haven from risk as markets descended into chaos.
But that has not been enough to support it as losses have
intensified.
"The flight to quality into gold and possibly silver is not
necessarily a valid approach to the market right now," said Alan
Plaugmann, head of futures and options at Saxo Bank.
"The majority of people are favouring cash and fixed income
over pretty much any other asset class out there."
The dollar benefitted from the market turmoil, hitting a
14-month high against a basket of currencies as investors sold
emerging market stocks and rushed back to the relative safety of
the U.S. currency. []
U.S. stocks fell sharply at the open, with the Dow sinking
as much as 8 percent, but recovered as traders perceived the
slide as overdone. []
European stocks dived more than 7 percent by midday, swept
up in a global sell-off, as investors worried concerted efforts
from governments and central banks to stabilise the financial
markets would fail to avert recession. []
Turmoil on the equity markets sparked a broad-based sell-off
of commodities. Crude futures fell more than $7 to hit a
one-year low as fears that economic turmoil would cut demand.
[]
Industrial metals such as copper and aluminium slid and
agricultural commodities all tumbled.
INDIA SELLING
Recent prices rises have caused some selling in India, the
world's largest gold market, ahead of this month's Hindu
festivals.
"There are a lot of sellers today, mainly holders of small
quantities of jewellery and bars," Jitendra Kantilal, a partner
at bullion dealer Jugraj Kantilal & Co, told Reuters.
Nonetheless, investment demand has been firm. The world's
largest bullion-backed ETF, New York's SPDR Gold Trust, said its
holdings rose to a record 765.74 tonnes on Thursday as investors
sought a haven from risk.
Among other precious metals, silver was quoted at
$11.70/11.80 against $12.01 late in New York on Thursday, having
earlier touched a low of $11.22.
The platinum group metals tumbled, tracking losses in the
industrial metals. Spot platinum <XPT=> was trading at
$990/1,014 an ounce against $1,018.50. Earlier it fell 3 percent
to an intraday low of $982.
Its sister metal palladium <XPD=> fell to $189.50/199.50
from $198, having earlier touched a session low of $184.50, its
weakest level since October 2005.
Both PGMs have suffered from fears over falling demand from
carmakers, who account for around half of global consumption.
(Reporting by Jan Harvey; editing by Michael Roddy)
