* Gold up 1 percent after House rejects bailout
* Platinum hits lowest in more than two years on demand
worry
(Updates prices, adds quotes)
By Lewa Pardomuan
SINGAPORE, Sept 30 (Reuters) - Gold rose on Tuesday to
extend a 5-percent rally from the previous day after U.S.
lawmakers rejected a $700 billion bailout plan, sending global
markets sliding but boosting bullion's appeal as an alternative
investment.
The Nikkei average <> tumbled nearly 5 percent to hit
a three-year low after the Dow industrials plunged in their
biggest decline ever on Monday following the rejection of the
plan to buy up toxic assets from struggling banks.
Spot gold <XAU=> was trading at $903.35 an ounce, up $0.10
from New York's notional close, having hit an intraday day high
of $914. Gold held near a two-month high of $920 hit on Monday
but was still below a lifetime high of $1,030.80 struck in
March.
"The gold market is telling us that the world economy is in
peril," said Jeffrey Nichols, managing director of American
Precious Metals Advisors.
"In the short run, any meaningful policy response that
reduces fear and anxiety could trigger a correction in gold --
but, longer term, whatever happens, gold is almost certainly
moving higher," he said.
U.S. lawmakers rejected a $700 billion bailout plan for the
financial industry in a shock vote that sent global markets
falling as European authorities scrambled to prop up a slew of
banks. []
"I expect gold will breach the $1,000 an ounce level and
move to new historic highs before year-end 2008 or in the early
months of next year," said Nichols.
Gold has benefited from a wave of risk aversion after U.S.
investment bank Lehman Brothers filed for bankruptcy
protection. On Sept. 17, gold saw the largest one-day dollar
price rise in history.
"In the near term, I will be looking at the regions around
$920 for a stronger move. I believe if we start moving
significantly above those regions, gold's going to head much
higher," said Adrian Koh, analyst at Phillip Futures.
"Platinum is still closely tied to the economy and things
don't look very good now. An economic slowdown is going to
weigh heavily on platinum demand and auto stocks in Japan are
really hurting on the bailout plan," he said.
Platinum <XPT=> was trading at $1,038.50 an ounce, down
$41.50 or $3.84 percent from New York's notional close. It was
the metal's weakest level since March 2006.
Japan's Toyota Motor Corp <7203.T> said it started cutting
production in China as sales growth in the region fails to meet
expectations. Car sales growth in China slowed to 17.07 percent
in thefirst half after rising 20 percent or more annually since
2005.
Gold futures for December delivery <GCZ8> on the COMEX
division of the New York Mercantile Exchange rose $15.3 an
ounce to $909.7 an ounce.
Precious metals prices at 0226 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 903.35 0.10 +0.01 8.48
Spot Silver 13.07 0.00 +0.00 -11.51
Spot Platinum 1038.50 -41.50 -3.84 -31.68
Spot Palladium 208.00 -3.50 -1.65 -43.48
TOCOM Gold 3006.00 31.00 +1.04 -1.76
21328
TOCOM Platinum 3463.00 -294.00 -7.83 -35.14
12020
TOCOM Silver 434.80 -5.40 -1.23 -19.63
737
TOCOM Palladium 696.00 -53.00 -7.08 -48.48
694
Euro/Dollar 1.4361
Dollar/Yen 104.09
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Additional reporting by Miho Yoshikawa in Tokyo; Editing by
Michael Urquhart)
