(Updates prices after U.S. data)
By Pratima Desai
LONDON, Oct 3 (Reuters) - Gold slipped on Friday as the
dollar rose after U.S. jobs data and the market waited for an
expected vote by the U.S. Congress on a $700 billion bailout
package for financial firms.
Platinum <XPT=> hit a near-three year low of $939 an ounce.
The metal used in autocatalysts has lost more than 50 percent
since a record high of $2,290 in March because of economic
weakness and falling car sales, especially in the United States.
The dollar rose after data showed the September U.S. jobless
rate unchanged at 6.1 percent, despite employers cutting
payrolls at the steepest rate in 5-1/2 years. []
Spot gold <XAU=> was at $832.40/834.40 an ounce at 1304 GMT
compared with $835 late in New York on Thursday, when it hit a
two-week low $829.20 an ounce.
The vote in the U.S. House of Representatives on legislation
to mop up banks' illiquid assets and ease the credit crunch,
could go ahead later on Friday. []
If the bill is approved then the dollar could stage a
recovery and an easing of financial market tensions could see
investors cutting gold investments. []
"The financial bailout in the U.S. will go ahead, this is
our working assumption, and there will be some money leaving the
gold market," said Dan Smith, analyst at Standard Chartered.
"There will be a withdrawal as panic fades and the gold
price will come off as we move into the fourth quarter. The
bailout will improve confidence, but in the longer term it will
mean a much weaker dollar and higher gold prices."
PLATINUM POTENTIAL
Analysts think worries about the budget deficit in the
United States could persaude investors to sell U.S.-assets in
the longer term, which would send the dollar tumbling.
A weaker dollar makes commodities priced in dollars cheaper
for holders of other currencies, while gold is often used as a
hedge against financial market trouble and price pressures.
"Although sentiment towards gold has improved significantly
of late amid the financial market turmoil and concerns over the
broader economy, prices have not continuously outperformed,"
said Barclays Capital in a research note.
Gold prices are down nearly 20 percent since a record high
of $1,030 an ounce seen on March 17.
Platinum was at $946/966 an ounce from $960 late in New York
on Thursday. More than 60 percent of global use in platinum goes
to autocatalysts. Platinum is also used in jewellery.
Major automakers reported plunging U.S. sales for September,
led by a 34 percent slide at Ford Motor Co, as the escalating
credit crisis hit the industry and raised new doubts about when
the world's auto market would stabilise. []
"In our view, beyond short-term weakness, upside potential
still exists for prices longer term, as supply problems are
likely to persist given the power problems, the shortage of
skilled labour and rising costs of production," Barclays said.
Silver <XAG=> was at $11.22/11.31 an ounce from $10.79 on
Thursday and palladium <XPD=> at $189/199 from $191.50.
(Reporting by Pratima Desai; editing by Peter Blackburn)
