* Platinum slips sharply in Asia, dragging other metals down
* Oil slips below $112 a barrel as supply fears ease
* Dollar climbs to six-month high versus the euro
(Recasts, updates throughout, changes dateline, pvs SINGAPORE)
By Jan Harvey
LONDON, Aug 19 (Reuters) - Precious metals languished in
Europe on Tuesday after slipping sharply in Asian trade, as oil
prices slipped and the dollar rallied to a fresh six-month high
against the euro.
Platinum dropped more than 6 percent, gold by more than 2
percent and silver by 5 percent earlier in the session as Asian
traders sold off the metals. Benchmark Tokyo platinum futures
fell by their daily limit to a one-year low.
"Platinum closed in New York last night around $1,390 and
this morning we hit a low below $1,300," said Afshin Nabavi,
head of trading at MKS Finance. "That was the main reason for
everything else coming off quite sharply."
Spot platinum <XPT=> was at $1,317.50/1,337.50 at 0953 GMT
against $1,386.00/1,406.00 an ounce late in New York, having
earlier touched a session low of $1,296.50.
The white metal is coming under pressure from fears slowing
economic growth could dent demand from the automotive industry,
which consumes more than half of the world's platinum.
Investment bank Investec cut its third-quarter price target
for platinum on Tuesday to $1,660 an ounce from $2,050 an ounce,
and sliced its full-year market deficit to 194,000 ounces.
The oil market also slipped on Tuesday, further weighing on
the precious metals, and could decline further if Wednesday's
U.S. oil inventory data shows stocks are rising.
"The consensus is looking for a strong build of crude oil
inventories to be reported tomorrow," Dresdner Kleinwort
consultant Peter Fertig said. "The outlook for weaker demand is
probably pushing crude oil prices deeper to the south."
"Falling crude oil prices are another negative factor for
gold and other precious metals," he added.
Lower crude prices tend to pressure gold in particular, both
because it is often bought as a hedge against oil-led inflation
and because weakness in oil dents interest in commodities as an
asset class.
Oil fell below $112 a barrel on Tuesday as concerns over
possible supply disruptions in the Gulf of Mexico eased as
Tropical Storm Fay swept through the area with minimal
disruption. []
The firmer dollar is also weighing on interest in gold,
which is often bought as a hedge against weakness in the U.S.
currency.
The dollar resumed its upward march on Tuesday, rising to
its highest level this year against a basket of currencies amid
fears over slowing global growth, and hitting a six-month peak
against the euro. []
Gold and silver prices tracked platinum lower, pressured by
oil and the dollar. Gold slipped to a session low of $782.05,
before ticking back up to trade at $793.70/794.70 an ounce
against $799.65/801.05 late in New York on Monday.
Gold prices have hit good support at $775 an ounce and
should hold this level as interest in physical gold from
jewellers is stoked by lower prices. Buying has picked up
sharply in the last week as prices have fallen, traders say.
Among other precious metals spot palladium <XPD=> fell to
$274.50/282.50 an ounce from $283.00/291.00 an ounce.
Silver <XAG=> slipped to $12.96/13.02 an ounce from
$13.07/13.13 an ounce, having earlier touched a low of $12.45.
(Reporting by Jan Harvey; Editing by Michael Roddy)
