* Gold slides more than 1 pct as oil slips $6 a barrel
* Dollar gains as Bernanke reassures financial markets
* Platinum touches 5-week low on demand fears
(Recasts, adds comment, updates prices)
By Jan Harvey
LONDON, July 8 (Reuters) - Gold slid more than 1 percent on
Tuesday as oil prices shed more than $6 a barrel and as the
dollar firmed after comments from Federal Reserve chairman Ben
Bernanke.
Spot gold <XAU=> fell to $914.20/915.20 an ounce at 1505 GMT
from $925.15/926.35 an ounce late in New York on Monday. Earlier
it touched a session low of $912.50.
The precious metal edged up a touch earlier in the session
as the financial markets wilted, spurring buying of the precious
metal as an alternative investment.
However, the fact they did not react more to stock market
weakness undermined positive sentiment.
"I would have expected gold to have done better earlier on,
and it failed to," said HSBC analyst James Steel.
"Given that, the fact that the oil market resumed its
decline and the dollar, which was weaker at the time, has
rallied, was more than enough to knock gold even lower."
Weaker oil prices are denting interest in gold as an
inflation hedge and undermining confidence in commodities as a
whole. []
Crude slipped more than $5 a barrel to its lowest level in
almost two weeks after reports said an Atlantic hurricane it was
feared would hit the Gulf of Mexico was forecast to miss oil
facilities there.
The dollar also firmed after Fed chairman Ben Bernanke said
the U.S. central bank may keep an emergency lending facility for
major Wall Street firms open beyond the end of the year.
[]
Gold typically moves in the opposite direction to the
dollar, as it is bought as a hedge against weakness in the U.S.
currency.
ETF BUYING
In fundamental terms, demand for gold is mixed. Strong
investor inflows into ETF funds show investor sentiment towards
gold remains strong, said Calyon metals analyst Robin Bhar.
London's ETF Securities said on Monday that the amount of
gold held to back its physical gold ETF rose 15 percent last
week, while gold holdings at New York's SPDR Gold Trust edged up
0.1 percent to 658.99 tonnes on Monday. []
"(ETFs are) proof that people are diversifying into precious
metals and into gold specifically," Bhar said.
However, the jewellery market remains under pressure. James
Steel at HSBC said gold imports into India, the world's leading
buyer of gold jewellery, slumped 67.6 percent in June to 24
tonnes from 74 tonnes a year before.
"We've seen in the last year enough investment demand to
more than compensate for the slackness in jewellery (demand),"
said Steel.
"But that will not continue forever, and if you do get some
sort of respite in investment demand everyone will start talking
about the jewellery and the price will fall."
Among other precious metals, silver <XAG=> dipped to
$17.64/17.69 an ounce against $17.79/17.84 late in New York.
Spot platinum <XPT=> fell to a new five-week low of
$1,948.50 an ounce, before steadying to trade at
$1,949.00/2,069.00 from $1,967/1,987 late in New York.
The metal is being pressured by fears over falling demand
from carmakers as the U.S. economy falters. Platinum is widely
used in autocatalysts.
Spot palladium <XPD=> fell to $438.00/446.0 an ounce from
$443.00/451.00 an ounce.
(Reporting by Jan Harvey; Editing by Nigel Hunt)
