* Gold dips as dollar moves off lows, oil softens
* Safe haven buying lends support
* Platinum extends losses amid demand fears
(Recasts, adds comment, changes dateline, pvs SINGAPORE)
By Jan Harvey
LONDON, July 16 (Reuters) - Gold edged lower on Wednesday as
the dollar steadied off the previous session's lows, denting the
precious metal's appeal as a currency hedge, and as oil prices
softened.
However, the precious metal remains well supported by
safe-haven buying amid fears over the health of the U.S.
financial system.
Gold <XAU=> fell to $972.40/973.40 an ounce from
$975.90/977.90 an ounce late in New York.
"We have seen the dollar coming off its lows .. which has
pushed gold down," said Standard Bank metals analyst Walter de
Wet. "But our general view is that credit risk is still very
high, and we might see more upside for gold."
Buying of gold as an alternative to more risky assets such
as stocks, along with a weak dollar, which hit an all-time low
against the euro, helped send the precious metal to a four-month
high of $987.75 on Tuesday.
But a recovery in the U.S. currency early on Wednesday has
reduced buying of the precious metal as an alternative to the
dollar and is helping to keep a lid on fresh gains.
The dollar steadied around a cent above Tuesday's record low
against the euro on Wednesday, as investors welcomed new
measures to stabilise U.S. financial stocks and a dip in oil
prices. []
OIL SLIPS
Oil extended losses after it dropped sharply on Tuesday,
when hedge fund selling knocked New York crude down over $9 a
barrel to a session low of $135.92. []
Gold tends to move in line with oil, as the precious metal
is often bought as a hedge against oil-led inflation. Strength
in crude can also boost interest in commodities as a whole.
The market is now turning to the second day of Federal
Reserve Chairman Ben Bernanke's testimony on the outlook for the
U.S. economy, although analysts say its effect is likely to be
limited compared to Tuesday's session.
"The second day of the semi-annual Bernanke testimony, this
time to the House Financial Services Committee, is likely to
have less impact on gold," said Dresdner Kleinwort consultant
Peter Fertig.
"The statement is identical to yesterday's testimony, only
the Q & A session will be different."
U.S. economic data due out on Wednesday include June CPI
and industrial production numbers, while the oil market will
also be eyeing U.S. stockpile data due at 1430 GMT.
"The US economic data might be negative for gold, as a
falling industrial production would underline Bernanke's
assessment that risks to growth have risen," noted Fertig.
Among other precious metals, spot silver <XAG=> tracked gold
higher to $18.84/18.89 an ounce from $18.86/18.93 late in New
York.
Platinum dipped to a two-month low, however, as the gloomy
outlook for the global economy deepened fears over demand from
carmakers for autocatalysts, of which the white metal is a major
component.
"Concerns over demand from autocatalysts (are pulling) down
prices following news from Toyota <7203.T> that it will cut this
year's global sales target by 350,000 vehicles to 9.5 million,"
said Fairfax analyst Marc Elliott in a note.
"Another major auto producer, GM <GM.N>, yesterday said it
would cut dividends and sell assets to raise cash due to weak
sales."
Platinum fell as low as $1,931 an ounce, its weakest
level since May 8, before pulling back to trade at
$1,971.00/1,991.00 late in New York.
The white metal has fallen by nearly 5 percent in the last
month.
Spot palladium <XPD=> fell to $439.00/447.00 an ounce from
$440.00/448.00 late in New York.
(Reporting by Jan Harvey; Editing by Peter Blackburn)
