* Gold rises further as dollar struggles
* Platinum hits 2-month low before rebounding
(Updates prices, adds quotes)
By Lewa Pardomuan
SINGAPORE, July 22 (Reuters) - Gold extended gains on
Tuesday as uncertainties in the U.S. financial system lingered,
making the metal an attractive alternative investment, while
platinum fell to its lowest level in more than two months on
demand fears.
The most active gold contract on the Tokyo Commodity
Exchange held near its highest level in 25 years as Japanese
investors returned to the market after a holiday, and a firm
cash market helped spur buying.
Gold <XAU=> rose to $967.50/968.50 an ounce from
$961.75/963.15 an ounce late in New York on Monday -- not far
from a four-month high of $987.75 hit last week.
Physical buying was limited as jewellers waited for clues
from the energy market after oil slipped from this month's
all-time peak above $147 a barrel, dealers said.
"It's a very slow physical market. Oil is down from last
week's levels but nobody knows when it will rebound," said
Ellison Chu, manager of precious metals at Standard Bank Asia
Ltd in Hong Kong.
He expected bullion to trade in the range of $960 to $980
an ounce.
The benchmark Tokyo gold contract for June 2009 delivery
<0#JPL:> on TOCOM rose 28 yen per gram to 3,341 yen. It hit a
one-week high of 3,345 yen -- just below a 25-year high of
3,346 yen struck last week.
The euro was barely changed at $1.5925 <EUR=>, having
gained in New York with the market focusing on a rescue plan
for troubled U.S. mortgage finance giants Fannie Mae <FNM.N>
and Freddie Mac <FRE.N>. []
"There's a very bullish momentum here. Gold is well
supported above the $955 level," said Willian Kwan, bullion
director at Gold Capital Management in Singapore.
"I believe there's an increase in short positions by the
small specs. They might be washed out when the price of gold
hits $972," he said.
Oil <CLc1> eased 41 cents to $130.63 a barrel as Tropical
Storm Dolly, the first big storm threat of2008 for offshore oil
producers in the Gulf of Mexico, lookedunlikely to affect U.S
production. []
Spot platinum <XPT=> hit a low of $1,825.50, its lowest
since May 2, before rebounding to $1,843.50/1,863.50 an ounce,
up from $1,837/1,857 in New York. Platinum was hit by fears of
falling demand for autocatalysts due to a slowing U.S. economy.
"There's not much large fund buying in platinum at the
moment. That's why it's not moving, it's coming off," said Kwan
of Gold Capital Management.
"Take a look at other indicators, maybe RSI. It's oversold.
I think things should pick up from here," he said.
Platinum's 14-day relative strength indicator (RSI) stood at
20.45 on Monday, down from 50.91 last week. The market views an
RSI of 30 or less as oversold and 70 or more as overbought.
Gold futures for August delivery <GCQ8> on the COMEX
division of the New York Mercantile Exchange added $4.8 to
$968.50 an ounce.
Spot palladium <XPD=> rose to $414.50/422.50 an ounce from
$410.50/418.50 late in New York. Silver <XAG=> edged up to
$18.48/18.54 an ounce from $18.35/18.43 late in New York.
Precious metals prices at 0406 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 967.75 2.45 +0.25 16.22
Spot Silver 18.48 0.09 +0.49 25.12
Spot Platinum 1845.50 8.50 +0.46 21.41
Spot Palladium 414.50 3.00 +0.73 12.64
TOCOM Gold 3342.00 29.00 +0.88 9.22
19296
TOCOM Platinum 6246.00 -55.00 -0.87 16.99
14442
TOCOM Silver 639.50 -1.70 -0.27 18.21
616
TOCOM Palladium 1459.00 -16.00 -1.08 7.99
441
Euro/Dollar 1.5922
Dollar/Yen 106.40
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Editing by Clarence Fernandez)
