(Updates with New York prices, comment. Adds U.S. House bill
passage reaction. Rewrites throughout.)
By Carole Vaporean and Pratima Desai
NEW YORK/LONDON, Oct 3 (Reuters) - Gold held onto
moderately lower levels after the U.S. House of Representatives
voted to pass a $700 billion bill to bail out the U.S.
financial system, despite a slide in the dollar against the
euro.
Analysts said they thought most investors who wanted to
exit gold as a safe haven play if the bill passed likely did so
during Thursday's rout.
"I think people who wanted to get out got out already. They
postured themselves ahead of time, because they thought the
bill was going to pass and it did. There's no reason for
further flight to quality if you feel the bill is going to
pass," said Scott Meyers, Pioneer Futures Inc, senior trading
analyst in New York.
Meanwhile, platinum hit a low dating back to November 2005
at $936.50 an ounce as economic weakness and dismal car sales,
especially in the United States, have dampened demand for the
metal.
Used in autocatalysts, platinum has fallen about 60 percent
from its record high of $2,290 an ounce hit in March.
An early dollar rally undermined most precious metals
following release of the September U.S. labor market report,
which showed an unchanged employment rate at 6.1 percent.
A sharp 159,000 decline in U.S. nonfarm payrolls in
September, well below the 100,000 loss forecast by economists
and below August's revised decline to a 73,000 jobs loss,
maintained nervousness in financial markets.
Story: [] Table: [].
Though the dollar's advance hit gold prices, continued
economic uncertainty from the sharp drop in payrolls kept
support under the yellow metal all day.
Once the U.S. bailout bill passed, the dollar fell against
the euro without putting pressure on gold. []
Spot gold <XAU=> traded with moderate losses at
$828.15/832.15 an ounce by 2:39 p.m. EDT (1829 GMT), down from
$838.00/841.00 an ounce late Thursday.
Earlier, spot gold fell two percent to $818.70 an ounce,
its lowest since September 17.
December gold <GCZ8> finished $11.1 lower at $833.20 an
ounce, a 1.31 percent decline on the COMEX division of the New
York Mercantile Exchange. It fell as low as $822.50, a 2-1/2
week low, after the jobs data.
The U.S. House voted to approve legislation to rescue
banks' with illiquid assets and ease a credit crunch that had
frozen U.S. and other economies. []
Analysts said they thought the bailout would improve
confidence, but would mean a weaker dollar and higher gold.
A dollar decline makes commodities cheaper for investors
holding other currencies, while gold is often used as a hedge
against financial market trouble and price pressures.
"Although sentiment towards gold has improved significantly
of late amid the financial market turmoil and concerns over the
broader economy, prices have not continuously outperformed,"
said Barclays Capital in a research note.
Gold prices are down nearly 20 percent since a record high
of $1,030 an ounce seen on March 17.
Spot platinum <XPT=> slipped to $950.50/974.50 an ounce in
late New York dealings, down from $960 on Thursday.
About 60 percent of platinum goes into autocatalysts and
despite this week's sharp decline in U.S. car sales, analysts
said they think supply shortages will keep prices supported.
"In our view, beyond short-term weakness, upside potential
still exists for prices longer term, as supply problems are
likely to persist given the power problems, the shortage of
skilled labor and rising costs of production," Barclays said.
Spot silver <XAG=> was higher at $11.15/11.25 an ounce by
2:51 p.m EDT (1900 GMT) in New York versus $11.07/11.15 an
ounce late on Thursday.
Spot palladium <XPD=> was quoted at $194.00/204.00 an ounce
in late business.
(Reporting by Carole Vaporean and Pratima Desai; editing by
Jim Marshall)
