* Gold hits seven-week high before slipping
* Platinum, silver also off highs
(Recasts, updates prices)
By Lewa Pardomuan
SINGAPORE, Sept 23 (Reuters) - Gold dropped below $900 an
ounce on Tuesday after early buying which propelled the price
to a seven-week high lost steam, but uncertainties over the
U.S. government's bailout plan may offer support.
Platinum was off two-weeks high after posting the biggest
one-day percentage gain in at least 23 years on Monday, while
silver firmed to its highest level in three weeks, before
losing some of the gains to profit taking.
Gold <XAU=> was trading at $895.00 an ounce, down $5.20 an
ounce or 0.6 percent from New York's notional close on Monday,
having hit an intraday high of $908.80 an ounce -- its highest
level since early August.
"I think the next two to three days will be very telling,"
said Darren Heathcote of Investec Australia in Sydney.
"There's potential in the days ahead we might go back below
$900, but one would expect we are going to get a lot of support
probably in the $870 to $880s. Likewise, we may find resistance
pushing through about $930 at the moment," he said, referring
to a level last seen in July.
Gold last hovered around $870 and $880 in August.
The euro <EUR=> eased to $1,4784 but held near a one-month
high struck on Monday when it posted its biggest one-day gain
since 1999 on fears a $700 billion bailout for the financial
sector may not resuscitate the economy. []
In theory, a weaker dollar boosts gold's appeal as an
alternative investment to currencies, stock markets and bonds.
Despite gold's gains, dealers remained cautious, with the
metal already moving in a wide range since tumbling to an
11-month low of $736 an ounce two weeks ago. Gold is way below
a lifetime high of $1,030.80 hit in March.
"I think it's more towards speculative than safe haven
buying. If we are talking about safe-haven buying, I guess that
already happened last week, when we saw the large gains in
gold," said a dealer in Singapore.
Gold has benefited from a wave of risk aversion after U.S.
investment bank Lehman Brothers filed for bankruptcy
protection. Last Wednesday, bullion saw the largest one-day
dollar price rise in history.
Platinum <XPT=> hit a high of $1,255.50 an ounce, its
highest since Sept. 9, before easing to $1,235.00 an ounce,
down $9.50 or 0.768 percent from New York's notional close.
Platinum posted its biggest one-day percentage gains on
Monday to track rises in gold, according to Reuters data which
dates back to 1985.
"I guess it's a bit of spillover strength in gold on
platinum. Judging by how much gold has gained in the previous
week, platinum is still a bit behind," said the Singapore
dealer.
"For platinum, I am looking at the $1,296.50 region for
resistance, while support will come in at $1,164.50," said the
dealer, referring to levels last seen in 2007.
Platinum hit a 2-1/2-year low at $1,042 last week as
slowing U.S. economy and poor car sales forced automakers to
slash their production plans. Platinum is mainly used in
autocatalysts.
Dealers said automakers were on the sidelines, suggesting
the gains were mainly driven by speculative buying.
Gold futures for December delivery <GCZ8> on the COMEX
division of the New York Mercantile Exchange fell $7.7 an ounce
to $901.3 an ounce.
Precious metals prices at 0530 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 895.00 -5.20 -0.58 7.48
Spot Silver 13.39 -0.01 -0.07 -9.34
Spot Platinum 1235.00 -9.50 -0.76 -18.75
Spot Palladium 253.00 -0.50 -0.20 -31.25
Euro/Dollar 1.4788
Dollar/Yen 105.35
(Editing by Ben Tan)
