RTRS: Gold hit by dollar, platinum at near-3 year low
By Lewa Pardomuan
SINGAPORE (Reuters) - Gold bounced on Friday but held within sight of a two-week low as the U.S. dollar hovered near a one-year peak against other currencies, while platinum was at its weakest in almost three years on demand fears.
Platinum, mainly used in autocatalysts to clean exhaust pipes, has lost more than 50 percent in value since spiking to a lifetime high at $2,290 an ounce in March, on profit taking and recently on poor car sales and a slowing U.S. economy.
Platinum was also hit by falling gold prices after the dollar gained on hopes the U.S. Congress would pass a $700 billion bailout plan. In theory, a rising dollar reduces gold's appeal as an alternative investment to currencies, stocks and bonds.
Gold was trading at $841.50 an ounce, up $6.50 from New York's notional close on Thursday, when it hit an intraday low of $829.20 an ounce.
"We will have to see how the dollar reacts to the (bailout) bill and the jobs data. I am still slightly positive on the dollar," said Adrian Koh, an analyst at Phillip Futures in Singapore.
"With the European Central Bank signaling a possible rate cut, seems like the euro is going to be a bit pressured. I am looking at $820 for near-term support, then $800. Upside resistance will come in around $845," said Koh, referring to levels seen in August.
Gold hit an intraday low of $830.70 on Friday and was well below a record of $1,030.80 struck in March.
U.S. House Democratic leaders expressed optimism on Thursday a revised $700 billion financial industry rescue bill passed by the Senate will clear the House of Representatives.
The dollar index, which gauges performance against a basket of six major currencies, barely moved at 80.370 on Friday after reaching a one-year peak of 80.794 the previous day.
Investors also await the release of an employment report by the Labor Department on Friday after U.S. weekly initial jobless claims came in higher than expected, underscoring the deterioration in the labour market.
Platinum was trading at $955.00 an ounce, down $5.00 from New York's notional close, having hit an intraday low of $946.50 an ounce, its lowest level since December 2005, as poor car sales weighed on sentiment.
"Platinum below $1,000 is incredible. Jewellery demand has decreased so much, and so much scrap has been sold back to fabricators," said Yukuji Sonoda, precious metals analyst at Daiichi Commodities in Tokyo.
"It's very possible for platinum to fall to $900," said Sonoda, referring to a level last seen in August 2005.
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.
New York gold futures rose $1.9 to $846.2 an ounce.