UPDATE 6-Precious metals end down as dollar hits year high

                                
 * Dollar surges to new one-year high versus euro
                                
 * Platinum, palladium pull up from multi-year lows
                                
 * U.S. oil futures settle lower near $100 a barrel
                                
 (Recasts, updates with late prices, adds trader comment,
byline dateline)
                                
 By Carole Vaporean and Jan Harvey
                                
 NEW YORK/LONDON, Sept 11 (Reuters) - Gold fell to an
11-month low on Thursday as the dollar surged to a fresh
one-year high against the euro, but physical demand for the
precious metal underpinned prices.
                                
 The stronger dollar was the key factor driving gold to
fresh 11-month lows, platinum to its weakest level since
January 2007 and silver and palladium to multi-year lows
earlier, as its recovery dented precious metals' appeal as an
alternative investment.
                                
 Spot gold <XAU=> declined to $739.60/741.20 an ounce from
$752.55/754.15 an ounce in late Wednesday business. Earlier it
slid to a fresh 11-month low at $736.0 an ounce.
                                
 December gold <GCZ8> fell $17, or 2.23 percent, to close at
$745.50 an ounce on the COMEX division of the New York
Mercantile Exchange. Earlier, it dropped to a one-year low at
$739.80.
                                
 Precious metals tumbled when the U.S. dollar was lifted to
a fresh year high against the euro by U.S. investors
repatriating overseas investments amid escalating concerns
about global economic slowing. [USD/]
                                
 With the effect of the strengthening dollar balancing
resurgent demand for coins, bars and jewellery, the outlook for
gold remains volatile, analysts said.
                                
 "From a fundamental point of view, I would expect (gold)
prices to be stronger over the coming months due to high
demand, but from a technical point of view, there are reasons
to believe they may go even lower," Commerzbank analyst Eugen
Weinberg said.
                                
 A New York trader said he thinks the precious metals rout
has more to do with the dollar near a key long-term euro
support level and crude oil on the verge of breaking down below
$100 a barrel.
                                
 "If either of those levels break, you're going to see a lot
more (gold) selling. And right now, a lot of people are
watching those two levels," the trader said.
                                
 Falling U.S. crude oil futures added to gold's declines.
U.S. crude prices dropped close to $2 a barrel to settle just
over $100 per barrel as a stronger dollar and weaker demand for
oil outweighed concerns of supply disruptions with Hurricane
Ike entering the Gulf of Mexico. [O/R]
                                
 Among other precious metals, platinum and palladium also
pulled up after dipping dramatically earlier.
                                
 Platinum slipped more than 4 percent and palladium over 5
percent as fears over the outlook for automotive sector demand
sparked selling. Over half of global platinum demand comes from
the car industry.
                                
 Spot platinum <XPT=> was quoted sharply lower at
$1,126.50/1,146.50 an ounce in late Thursday business from
$1,176.0/1,196.0 an ounce late Wednesday. Platinum's low at
$1,126.0 was last hit in January 2007.
                                
Spot palladium <XPD=> was at $226.50/234.50 an ounce, down
from $234.00/242.00 an ounce in late Wednesday dealings.
Earlier, it hit a low dating back to November 2005 at $219.50
an ounce.
                                
 Fears over demand have pushed platinum down more than 50
percent from the highs of $2,290 an ounce it hit in March this
year, after news of an electricity shortage in South Africa,
which produces 80 percent of global supply of the metal.
                                
 "Demand has come to the forefront rather than supply, which
the market was all about in the first half of this year," said
Mitsubishi precious metals strategist Tom Kendall. "People's
attention just keeps getting drawn back to...the auto
industry."
                                
 UBS analyst John Reade said in a note that "unprecedented"
over-the-counter liquidation in platinum, plus selling on
TOCOM, NYMEX and by exchange-traded funds, has seen 2-3 million
ounces of the metal sold since early July.
                                
 "Contrast that with annual supply of about 8 million ounces
and a forecast deficit of about 500,000 ounces, and the price
move becomes more understandable," he said.
                                
 Spot silver <XAG=> was up from earlier lows at $10.43/10.51
an ounce, but down from late Wednesday quotes at $10.75/10.83.
Its $10.25 low dates back to June 2006.
 (Reporting by Jan Harvey and Carole Vaporean in New York;
Editing by Marguerita Choy)