(Corrects spelling of day in first paragraph, deletes
extraneous word in 13th paragraph)
* Gold weakens to track oil
* Platinum down nearly 5 percent, demand worries resurface
* Oil below $90 on fears of falling demand
(Updates prices)
By Lewa Pardomuan
SINGAPORE, Oct 8 (Reuters) - Gold eased on Wednesday after
oil dropped more than $1, but falling stock markets also
spurred safe-haven buying by investors at lower levels, helping
lift holdings in the world's largest bullion-backed
exchange-traded fund.
Platinum dropped nearly 5 percent as poor sentiment offset
a recent rally which had pushed the price back to the $1,000
level on Monday. Silver tracked gold lower and palladium firmed
on bargain hunting.
Gold <XAU=> was trading at $881.35 an ounce, down $5.25 an
ounce New York's notional close on Tuesday, when it jumped to
as high as $890.60 an ounce, its highest in nearly a week, on
losses in stock markets.
Asian stocks fell about 4 percent on Wednesday, down for a
fifth consecutive day, as fears of a looming global recession
grew with no sign of a coordinated response or an end to the
worsening financial meltdown. []
"This is a good time to buy gold. Stock prices are not so
good. ETF is a good support for gold prices. This is the actual
investment buying," said Yukuji Sonoda, precious metals analyst
at Daiichi Commodities in Tokyo.
"The upside targets are $900 or $920," he said.
Gold hovered around $900 late last month, when hit a
two-month high of $920 on Sept. 29 on a weaker U.S. dollar. The
metal was well below a lifetime high of $1,030.80 struck in
March.
Holdings in the world's largest gold-backed ETF, the SPDR
Gold Trust <GLD>, rose to 745.22 tonnes as of Oct. 8 from
744.54 tonne as of Oct. 7. <XAUEXT-NYS-TT>.
Oil <CLc1> retreated below $90 a barrel as concerns the
global financial crisis will curb demand for fuels overshadowed
signs that producer group OPEC was considering a supply cut.
[]
In theory, weaker oil prices reduce gold's safe haven
appeal, but a tumbling stock market raised the metal's appeal
as an alternative investment.
"I think we are still watching developments in Europe, and
whether interest rates will go down worldwide. People are
buying gold for safe-haven purposes," said Ronald Leung,
director of Lee Cheong Gold Dealers in Hong Kong.
"I think we are still in a big trading range of $820 to
$920 for a while," he said.
The U.S. Federal Reserve stepped forward as a commercial
lender of last resort and signaled a readiness to cut interest
rates as pressure mounted for a coordinated, international
response to the most dangerous financial shock since the Great
Depression. []
Platinum <XPT=> was trading at $957.50 an ounce, down
$46.50 from New York's notional close to track weaker gold,
having regained $1,000 on Tuesday.
Platinum has been hit by heavy selling on fears of falling
demand for autocatalysts. It tumbled to $920 an ounce on
Monday, its lowest level since November 2005, on the back of
poor car sales, especially in the United States.
Prices are well below a lifetime high of $2,290 an ounce
struck in March.
New York gold futures <GCZ8> added $3.7 an ounce to $885.9
an ounce on the COMEX division of the New York Mercantile
Exchange.
Precious metals prices at 0239 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 881.35 -5.25 -0.59 5.84
Spot Silver 11.48 -0.03 -0.26 -22.27
Spot Platinum 957.50 -46.50 -4.63 -37.01
Spot Palladium 198.00 4.00 +2.06 -46.20
TOCOM Gold 2845.00 12.00 +0.42 -7.03
20188
TOCOM Platinum 3100.00 -144.00 -4.44 -41.94
11139
TOCOM Silver 371.50 -5.50 -1.46 -31.33
449
TOCOM Palladium 658.00 -15.00 -2.23 -51.30
152
Euro/Dollar 1.3593
Dollar/Yen 101.31
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Editing by Ben Tan)
