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RTRS: Platinum slips 3 percent on demand woes; gold steady
 
By Jan Harvey

LONDON (Reuters) - Platinum tumbled to a 33-month low as fears over demand from the car industry weighed on prices and the dollar rose to a one-year high versus the euro, but gold was steady as investors bought bullion as a haven from risk.

The passing of a proposed $700-billion rescue plan for Wall Street by the U.S. Senate has calmed some fears over the outlook for the financial sector, but the package has still to be approved by the House of Representatives.

Spot platinum was quoted at $979/999 an ounce at 0920 GMT, against $1,002 an ounce in late New York trade on Wednesday. Earlier it touched a session low of $976, its weakest level since January 2006.

Low U.S. auto sales figures released on Wednesday are pressuring the white metal.

"Motor vehicle sales in the U.S. came out way below expectations, the lowest since 1993 in terms of a month-on-month increase," said Standard Bank analyst Walter de Wet.

"When the market is illiquid, it is vulnerable to large moves," he added. "Combined with that, we have the dollar which is continuing to strengthen. There is nothing working in favour of platinum group metals at this stage."

Major carmakers reported plunging U.S. sales for September, led by a 34 percent slide at Ford Motor Co. The escalating credit crisis is raising fresh doubts as to when the world's largest car market will stabilise.

A dip in car sales in the U.S. has raised fears over the outlook for the entire global automotive industry.

Around half of the world's annual platinum demand comes from the car industry, which uses the white metal as a component in autocatalysts.

Platinum prices have shed nearly 60 percent of their value since they hit a record $2,290 an ounce in March this year, as demand fears dragged the market lower.

The stronger dollar is also pressuring platinum. The U.S. currency firmed to a one-year high against the euro on Thursday as the euro slid ahead of a European Central Bank decision on interest rates.

A stronger dollar makes dollar-priced metals such as platinum more expensive for holders of other currencies. It also tends to weigh on gold, which is often bought as an alternative investment to the dollar.

GOLD HOLDS STEADY

The firm dollar and losses in gold's other main external driver, oil, are keeping a lid on gains in gold on Thursday.

However, Fairfax analyst John Meyer said: "Gold prices have moved very little considering the recent U.S. dollar strength and the fall in oil prices."

Gold is taking support from the ongoing financial crisis, as investors buy gold as a safe store of value at a time of volatility in other assets, such as equities.

Spot gold was quoted at $867.10/869.10, against $868.75 in late New York trade on Wednesday.

Traders are eyeing the progress through Congress of the U.S. government's proposed $700-billion rescue plan for Wall Street.

On Wednesday, the plan was approved by the Senate, but still needed the assent of the House of Representatives before it could be put in place. Uncertainty over its future was still unsettling the markets, analysts said.

"The U.S. Senate passed the $700-billion rescue package after adding some sweeteners," said Dresdner Kleinwort analysts in a note. "However, the market reaction is muted as the bill is now going back to the House, which will vote on it on Friday."

"After representatives rejected the Paulson plan on Monday, investors remain cautious," it added.

Among other precious metals, silver slipped to $12.31/12.39 an ounce from $12.52, while palladium was unchanged at $201.50 an ounce.

Source