* Gold pares losses as session low rekindles buying
* Pressured as oil drops as a hurricane threat dissipates
* Dollar gains as U.S. central bank reassures financial markets
* Platinum touches five-week low on demand fears
(Releads with late buying, New York prices, comment, adds
byline, dateline.)
By Jan Harvey and Carole Vaporean
LONDON/NEW YORK, July 8 (Reuters) - Gold ended slightly lower on
Tuesday, paring early losses as some new fund buyers were undaunted
by additional declines in crude oil prices along with a rebound in
the dollar, compelling other players to cover short positions.
Spot gold <XAU=> moved up to $921.35/922.55 per ounce from
session lows by 1840 GMT, but remained lower than $925.15/926.35 in
late Monday trade in New York.
Earlier it touched a session low of $912.50 an ounce.
But when the low held during a bout of heavy midday selling,
some buyers regained the confidence to jump back into gold and buy
the lows.
On the COMEX division of New York Mercantile Exchange, August
futures <GCQ8> lost $5.50, or 0.6 percent, to end at $923.30 an
ounce, well off the session low of $913.
"I think this may be a turning point where gold can start doing
some independent pricing and potentially even leading again." said
Frank McGhee, head precious metals trader at Integrated Brokerage
Services LLC in Chicago.
As the day began, gold prices slid as weaker oil prices dented
interest as an inflation hedge and undermined confidence in
commodities as a whole.
"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 has rallied, was more than enough to knock gold even
lower."
Crude slipped by 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 and Carole Vaporean in New York; Editing
by Marguerita Choy)
