* Dollar firms versus euro, steady against currency basket
* Economic woes, CFTC news hurt industrial precious metals
(Updates prices)
By Jan Harvey
LONDON, July 8 (Reuters) - Gold fell in Europe on Wednesday
and platinum dropped below $1,100 an ounce for the first time
since May 18 as the dollar firmed against the euro, making
precious metals more expensive for holders of other currencies.
Hard commodities weakened across the board, hit by global
economic concerns and worries a potential clampdown on
speculation in U.S. energy and commodity trading could hurt
buying of the asset class. []
Spot gold <XAU=> slipped to a low of $915.20 an ounce and
was bid at $918.00 an ounce at 1414 GMT, against $923.30 an
ounce late in New York on Tuesday. Meanwhile platinum <XPT=> was
at $1,109 an ounce from $1,132, having touched a low of $1,099.
The dollar climbed broadly as growing risk aversion prompted
buying of the precious metal as a safe store of value. The U.S.
unit, weakness in which boosts gold's appeal as a currency
hedge, is currently the metal's chief driver. []
"In the last few weeks, the relationship between gold and
the dollar has been fairly slavish," said Stephen Briggs, an
analyst at RBS Global Banking & Markets. "But gold has even been
underperforming that, if you look at the euro price."
He said seasonally weak demand in the third quarter and a
tailing off in investment buying are also pressuring the metal.
Gold buying in India, the world's largest bullion consumer,
was weak as the dollar strengthened against the rupee, making
the metal more expensive for local consumers. []
Meanwhile gold jewellery sales in Dubai were down 30 percent
in June from a year earlier, as high prices and the economic
downturn hit buying. []
U.S. gold futures for August delivery <GCQ9> on the COMEX
division of the New York Mercantile Exchange slipped $10.70 to
$918.40 an ounce.
CAUTION
On the wider markets, sentiment was cautious, with European
shares falling for the fifth straight session. The losses
reflected a slide in Wall Street stocks to a ten-week low on
Tuesday, amid fears over economic weakness. [] []
Deutsche Bank analyst Michael Blumenroth said stock market
weakness could be seen as a sign of fresh trouble to come for
the economy, which may prompt further gold buying later in the
year.
Industrial commodities slipped amid doubts over the outlook
for the global economy, with both oil and industrial metals
trending lower. The more industrial precious metals -- platinum,
palladium and silver -- all posted losses. [] []
News the U.S. futures market regulator, the Commodity
Futures Trading Commission, was considering a clampdown on
excessive speculation in commodities by restricting holdings of
big players also hurt prices, dealers said. []
"The CFTC announcement is definitely putting some pressure
on metals, as well as on energy," said one European precious
metals trader.
The news prompted speculation that the approval of proposed
U.S. platinum and palladium ETFs could be delayed until the CFTC
had finished its deliberations.
"We do wonder whether the proposed U.S. listing of platinum
and palladium ETFs - under consideration by the SEC at present -
can possibly be approved until the CFTC's investigations are
concluded," UBS strategist John Reade said in a note.
Palladium <XPD=> was at $234 against $239. Silver <XAG=>
fell below $13 an ounce for the first time since May 5 to hit a
low of $12.91. It was later at $12.95 an ounce against $13.10.
(Reporting by Jan Harvey; Editing by Peter Blackburn)
