* Gold plunges in wide range as investors opt for cash
* Wall Street moves in a 1,000 point range to end lower
* Silver below $10, oil, agricultural in commodities sell
off
(Recasts, updates with quotes, market activity, closing
prices, adds NEW YORK to headline)
By Frank Tang and Jan Harvey
NEW YORK/LONDON, Oct 10 (Reuters) - Gold dropped as much as
9.6 percent on Friday, reversing sharp morning gains as a wave
of panic prompted investors to dump assets across the board to
meet liquidity needs.
Gold traded in a wide range of more than $100 an ounce on
Friday, capping a volatile week with gains of only 1.3 percent
even as global stock markets lost heavily.
Bullion in overnight trade touched a 2-1/2 month high of
$931 as a slide in the global equity markets sent investors
racing to a safe haven from the financial crisis.
However, even gold could not withstand relentless selling
across all asset classes as investors sought cash to cover
margin calls amid steep losses in stocks. It hit a low of
$823.50.
Spot gold <XAU=> dropped to $845.80 at 2:50 p.m. EDT (1850
GMT), down 7.2 percent from Thursday's nominal close at
$911.50.
"It's total panic. People are so scared that they are
looking to liquidate everything that has cash value and to stay
away from everything," said Bruce Dunn, vice president of New
Jersey-based Auramet Trading.
Dunn cited a sharp rally of the dollar and heavy losses incrude oil for gold's dramatic turnaround on Friday
"It's clearly euro-dollar related. It's also Friday so
conditions are thin," Dunn said.
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 gold contract for December delivery <GCZ8> settled down
$27.50, or 3.1 percent, at $859.00 an ounce on the COMEX
division of the New York Mercantile Exchange.
U.S. stocks fell sharply at the open, with the Dow sinking
as much as 8 percent, but recovered to trade 1 percent lower in
an extremely volatile session. []
European stocks dived more than 8 percent, 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 in commodities.
Crude futures <CLc1> fell as much as 10 percent to a
13-month low as fears that economic turmoil would cut demand
[], while industrial metals, such as copper and aluminium,
and agricultural commodities all tumbled.
The Reuters-Jefferies CRB index <.CRB>, a global
commodities benchmark, closed Friday at 289.89 with its
sharpest weekly loss of 11.2 percent.
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 <XAG=> breached below
$10 an ounce in more than two years. It was at $9.79, down 18.5
percent from Thursday's nominal close of $12.01 an ounce.
The platinum group metals tumbled, tracking losses in the
industrial metals. Spot platinum <XPT=> was trading at $985.50
an ounce against $1,018.50. Earlier, it fell 3 percent to an
intraday low of $982.
Palladium <XPD=> fell to $186.50 from its previous close of
$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.
(Editing by Marguerita Choy)
