* Chrysler bankruptcy not expected to hurt platinum demand
* Recovery in equity markets pressures gold
(Recasts, updates prices, market activity; adds second byline,
dateline, previously LONDON)
By Frank Tang and Jan Harvey
NEW YORK/LONDON, April 30 (Reuters) - Gold fell on Thursday
as better market sentiment toward the global economy and the
metal's failure to hold above $900 an ounce tempted investors
to take profits.
U.S. automaker Chrysler LLC filed for bankruptcy protection
after failing to reach an agreement with creditors
[], but the move should have little impact on
demand for platinum group metals used in autocatalysts, traders
said.
Spot gold <XAU=> was at $891.25 an ounce at 3:12 p.m. EDT
(1912 GMT), down 0.7 percent from its late Wednesday New York
quote of $897.60 an ounce.
U.S. gold futures for June delivery <GCM9> settled down
$9.30, or 1 percent, at $891.20 an ounce on the COMEX division
of the New York Mercantile Exchange.
Afshin Nabavi, head of trading at MKS Finance SA, said gold
had been pressured by the lack of a break above resistance at
$900, a decline in the euro and firmer stock markets.
A better tone in the stock markets is also denting interest
in bullion as a safe haven from risk, traders said.
Global stocks touched a four-month high on Wednesday on
hopes for an improvement in the U.S. economy. However, Wall
Street sharply trimmed gains by late afternoon trade.
A recovery in the equity markets has pressured gold, as
investors sell the precious metal to buy stocks. Hopes the
downturn may be bottoming out are likely to continue boosting
equities, further weighing on gold, analysts said.
The Federal Reserve said after a meeting on interest rates
on Wednesday the U.S. economic contraction seemed to be
slowing, cheering traders even as data showed the world's
largest economy shrank sharply in the first quarter.
"Any more positive economic sentiment will put downward
pressure on gold again, at least in the short term," Societe
Generale metals analyst David Wilson said.
On the demand side, the World Gold Council reported Indian
gold sales ahead of the key festival of Akshaya Tritya earlier
this week were down 8 percent from a year ago, not the dire
drop of 20 to 40 percent that that some local jewelers had
reported.
On the investment side, holdings of the world's largest
gold-backed exchange-traded fund, the SPDR Gold Trust <GLD>,
were unchanged for a fourth session on Wednesday.
The trust's gold assets have fallen 23 tonnes month on
month, against a rise of more than 98 tonnes in the preceding
four weeks.
CHRYSLER FILES FOR BANKRUPTCY PROTECTION
Chrysler LLC -- battered for the past two years by
disappearing global auto sales and the credit crisis -- filed
for bankruptcy protection on Thursday and announced an
industry-changing deal with Fiat after talks to restructure its
debt broke down.
Traders, however, contended that the platinum market has
already factored in lackluster auto demand.
"Platinum has recently gone through a healthy bull market
correction. The world is still going to build cars, to be
concerned about pollution control, and to sell platinum rings
and jewelry," said George Nickas, precious metals broker with
FC Stone in New York.
The car industry is the main consumer of platinum group
metals.
Spot platinum <XPT=> was at $1,102.50 an ounce, up 0.7
percent from its late Wednesday quote of $1,094.50, while
palladium <XPD=> was at $215.50 an ounce, down 1.4 percent from
its previous finish of $218.50, pressured by the drop in gold.
Losses in gold pressured other precious metals, with silver
<XAG=> at $12.38 an ounce, down 3.0 percent from its previous
finish $12.76.
But ETF Securities said holdings of its silver-backed
exchange-traded commodity <PHAG.L> rose 250,000 ounces or 1.4
percent on Wednesday.
(Reporting by Frank Tang and Jan Harvey; Editing by David
Gregorio)
