* Strong investment demand to buoy gold
* Higher dollar, tumbling Indian imports shrugged off
* Slumping auto sales weigh on platinum
(Updates prices after U.S. data)
By Pratima Desai
LONDON, Feb 2 (Reuters) - Gold slipped on Monday as
short-term investors took profits, but analysts say prices will
be underpinned by investors looking for a safe place to park
their assets, away from the turbulence in equity markets.
Spot gold <XAU=> was bid at $912.00 an ounce at 1404 GMT
compared with $927.00 in New York late on Friday when it touched
$930.40, the highest level since Oct. 10, a gain of more than 15
percent since the middle of January.
Traders said profit taking after gold's recent run higher
was behind lower prices on Monday.
However, deepening fears about the stability of the global
banking sector are expected to trigger further purchases of
gold, seen as a store of value. [] []
"Gold is currently working as a 'fear indicator', signalling
risk aversion of market participants," said Eugen Weinberg,
commodities analyst at Commerzbank.
"Strong investment demand should help gold prices to stay
around $900 in coming days ... Over the last few weeks the gold
price has increased despite a significantly stronger dollar and
news about a massive fall in Indian gold imports."
India is the world's largest gold consumer and its jewellery
sector accounts for almost 70 percent of global bullion demand.
The country's gold imports plunged more than 90 percent to
just 1.2 tonnes in January from 18 tonnes in the same month last
year. []
A stronger U.S. currency would normally weigh on gold as it
makes the precious metal, priced in dollars, more expensive for
holders of other currencies. []
SCALE OF INTEREST
But over the last few days both the dollar and gold have
moved in the same direction. Data showing falling consumer
spending and income in the United States did little to dampen
investor interest in the dollar. []
"Any reversal in financial market systemic risks should
increase precious metals' sensitivity to the dollar," Standard
Bank said in a note.
The scale of investor interest can be seen in the world's
largest gold-backed exchange-traded fund (ETF), the SPDR Gold
Trust <GLD>, which as of Jan. 29 held a record 843.59 tonnes of
gold, up 10.71 tonnes from Jan. 27.
"The surge in investor demand -- principally, though not
exclusively, via the ETFs -- has proved more than sufficient, so
far, to offset the drop in jewellery and other physical demand,"
HSBC said in a note.
"For as long as investors are prepared to accumulate bullion
in such large measures, gold prices are likely to head higher."
Whether gold can reach its record high of $1,030.80 an
ounce, hit last March, is still under debate and opinions, as
seen in a recent Reuters survey, are varied. []
The survey of more than 50 precious metals analysts showed a
range of between $650 and $1,150 an ounce for this year.
For platinum, the range for this year is $750 to $1200. The
metal, used in autocatalysts to help clean car emissions, is
down nearly 60 percent since a record high of $2,290 an ounce
March.
Recession and slumping car sales around the world and
expectations of worse to come for the auto sector will keep
prices low, analysts say.
Spot platinum <XPT=> was bid at $966.00 from $985 late in
New York on Friday, silver <XAG=> at $12.36 from $12.63 and
palladium <XPD=> at $190 from $191.
(Reporting by Pratima Desai; editing by Karen Foster and Sue
Thomas)
