* Gold falls to 3-week low, dollar weighs
* Platinum hits one-year low, palladium a near 3-year low
* Oil falls to new 5-month low
(Refreshes throughout)
By Humeyra Pamuk and Clare Black
LONDON, Sept 9 (Reuters) - Gold fell sharply, losing three
percent on Tuesday, as investors continued to take money out of
commodities following a broad rally in the U.S. dollar.
The sell-off spilled over into other precious metals, with
silver and platinum dropping to their lowest in a year, while
palladium was battered to its weakest in nearly three years.
Gold <XAU=> fell to $776.80 an ounce, its weakest in three
weeks. It was at $779.60/780.80 an ounce by 1430 GMT, down
sharply from $802.25/803.60 an ounce late in New York on Monday.
Prices are now very close to their low of the year at
$773.90 on Aug 15 a long way from an all-time high of $1,030.80
struck in March.
"The dollar rose from around 1.4300 to around 1.4100
(against the euro) yesterday and is definitely not bullish for
gold," said analyst Michael Widmer at Lehman Brothers.
The dollar rose versus the euro on Tuesday, but broader
gains were limited on mild profit-taking after a rally ignited
by the government's bailout of mortgage firms Fannie Mae and
Freddie Mac.
The U.S. unit hit a one-year high against major currencies
on Monday.
Although physical buying had supported the gold market
around $790 an ounce recently, that was overwhelmed on Tuesday
as the selling picked up pace.
"The sentiment is that it's going lower and that you can buy
it cheaper tomorrow. It looks very ugly at the moment," a senior
trader said.
FALLING OUT OF FAVOUR
Oil prices were also under pressure from the firmer dollar
and expectations that OPEC will not cut output when it meets
later on Tuesday. Crude <CLc1> fell to a new five-month low.
John Reade, analyst with UBS Investment Bank, said in a
research note that commodities may be falling out of flavour
with investors for cyclical reasons.
"Real money investors are showing a clear preference for the
U.S. dollar," he said.
Traders said that last week's news of the closure of Ospraie
Management LLC's flagship hedge fund, after it plunged 27
percent in August following losses in energy, mining and natural
resources equity holdings, had also knocked investor sentiment
in the asset class.
"Wobbly speculators are liquidating," one said.
Analysts said the slump in oil and metals prices of the last
six weeks due to softening demand for raw materials may
intensify if the bailout of Fannie Mae and Freddie Mac gave
investors more confidence in the U.S. currency and stock
markets. []
Spot platinum <XPT=> fell 6.6 percent to $1,248.00 an ounce
and was last at $1,253.50/1,274.00 from $1,337.00/1,357.00 late
in New York on Monday, when it tumbled nearly 4 percent.
Prices are now at their lowest since the end of August 2007.
Platinum group metals have been very badly affected by fears
of a drop off in demand from car manufacturers.
"Demand is very bad. Automakers are not buying," said
Kazuhiko Saito of Interes Capital Management in Tokyo, adding
that cash platinum may trade below $1,200 by end-September,
referring to a level last seen in March 2007.
Autocatalysts, used to clean exhaust fumes, account for more
than 50 percent of global demand. China's passenger car sales
fell in August from a year earlier, the first monthly decline in
more than two years as a slowing economy and the Beijing
Olympics kept would-be car buyers from showrooms.
[]
Palladium <XPD=> slid nearly eight percent to its lowest
since November 2005 at $234.50 and was last at $237.00/235.00
from $258.00/266.00.
Silver <XAG=> fell to $11.66/11.72 from $12.05/12.11, having
hit a new low for the year of $11.52.
(Additional reporting by Lewa Pardomuan, Editing by Peter
Blackburn)
