* Gold falls further but may get support from worries about
rising inflation
* Platinum drops to 11-week low on fears of falling demand
(Updates prices, adds quotes)
By Lewa Pardomuan
SINGAPORE, July 18 (Reuters) - Gold fell below $960 an
ounce on Friday on a recovery in stock markets, but tensions in
the Middle East and worries about rising energy costs were
likely to limit losses.
Platinum fell to an 11-week low as a sell-off in Tokyo
futures put pressure on spot prices. The metal has lost more
than 19 percent in value since rallying to a lifetime high of
$2,290 in March after power shortages disrupted mining in main
producer South Africa.
Gold <XAU=> fell to $956.50/957.50 an ounce from
$962.10/963.10 an ounce late in New York on Thursday -- off a
four-month high of $987.75 an ounce hit on Tuesday.
But uncertainty over the U.S. financial system and fears of
military confrontation between Iran and Israel that had sent
oil to record highs would still support gold, said Yukuji
Sonoda, precious metals analyst at Daiichi Commodities.
"As long as there's this possibility, the oil price will
not decrease that much. This is also a good support for gold.
Gold's bottom price is $900 and for oil, it is maybe $120," he
said.
Oil <CLc1> steadied around $129 a barrel after falling more
than $5 a day in previous session on growing worries over U.S.
demand. Oil was below last week's record of $147.27. []
Investors buy gold as a hedge against inflation, and fears
of rising energy costs helped propelled the metal to a lifetime
high of $1,030.80 in March.
"I don't think the oil market is going to fall much further
in near-term, so that will help the gold market," said Mark
Pervan, senior commodities analyst at ANZ in Melbourne.
The Nikkei average <> rose 0.4 percent on Friday, as a
softer yen lifted exporters. In theory, strong equity markets
dim gold's appeal as an alternative investment.
Spot platinum <XPT=> fell to $1,853.00/1,873.50 an ounce
from $1,881/1,901 late in New York on Thursday, having hit an
intraday low of $1,849.50 an ounce -- its lowest level since
May 2.
Platinum is suffering from a gloomy outlook for the global
economy, deepening fears over demand from carmakers for
autocatalysts, a major use for platinum.
General Motors Corp <GM.N> announced on Wednesday a
sweeping plan to cut $10 billion in costs over through 2009 and
to sell up to $4 billion in assets in order to shore up its
liquidity.
"There's a high possibility that General Motors will go
bankrupt. That's incredible," said Sonoda of Daiichi
Commodities.
Platinum could fall as low as $1,800 before picking up
again, with the help of a recovery in gold prices, he said.
Gold futures for August delivery <GCQ8> on the COMEX
division of the New York Mercantile Exchange fell $12.3 an
ounce to $958.4.
The most active Tokyo platinum contract for June 2009
delivery <0#JPL:> on the Tokyo Commodity Exchange ended the
morning session 239 yen per gram lower at 6,267 yen.
Spot palladium <XPD=> fell to $419.00/427.00 an ounce from
$420.00/428.00 an ounce. Silver <XAG=> rose to $18.53/18.59 an
ounce from $18.39/18.48 late in New York.
Precious metals prices at 0317 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 956.50 -0.10 -0.01 14.87
Spot Silver 18.51 0.01 +0.05 25.32
Spot Platinum 1852.50 -28.50 -1.52 21.88
Spot Palladium 420.00 0.00 +0.00 14.13
TOCOM Gold 3301.00 8.00 +0.24 7.88
21459
TOCOM Platinum 6267.00 -239.00 -3.67 17.38
16086
TOCOM Silver 639.70 -3.60 -0.56 18.24
286
TOCOM Palladium 1466.00 -31.00 -2.07 8.51
575
Euro/Dollar 1.5838
Dollar/Yen 106.32
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.
(Editing by Michael Urquhart)
