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UPDATE 3-Gold rebounds on covering,platinum at near-3 year low
* Gold near 2-week low on surging dollar
* Platinum strikes lowest in nearly 3 years on demand fears (Updates prices, adds quotes)
By Lewa Pardomuan
SINGAPORE, Oct 3 (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 recent weakness in 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 XAU= was trading at $838.80 an ounce, up $3.80 from New York's notional close due to short covering and anticipation of a poor U.S. employment report, having hit an intraday low of $829.20 an ounce on Thursday.
"I am not surprised we've seen some bounce in trading today from the lower levels that we went to last night," said David Moore, analyst at Commonwealth Bank of Australia.
"I think it's probably more related to the issues associated with uncertainty about the international economic outlook and strain in the financial system," he said.
Gold's rebound also plucked silver XAG= from a two-week low below $11 an ounce. Gold was still well below a record of $1,030.80 struck in March.
The dollar index, which gauges performance against a basket of six major currencies, barely moved at 80.437 on Friday .DXY after reaching a one-year peak of 80.794 the previous day. [USD/]
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.
"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.
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. [ID:nN02265016]
Platinum XPT= was trading at $960.00 an ounce, unchanged 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. [ID:nN01506733]
New York gold futures GCZ8 fell $2.1 to $842.2 an ounce. Precious metals prices at 0710 GMT Metal Last Change Pct chg YTD pct chg Turnover Spot Gold 838.80 3.80 +0.46 0.73 Spot Silver 11.17 0.38 +3.52 -24.37 Spot Platinum 960.00 0.00 +0.00 -36.84 Spot Palladium 199.00 7.50 +3.92 -45.92 TOCOM Gold 2839.00 -91.00 -3.11 -7.22 50422 TOCOM Platinum 3220.00 -97.00 -2.92 -39.69 19115 TOCOM Silver 382.60 -31.30 -7.56 -29.28 854 TOCOM Palladium 695.00 -7.00 -1.00 -48.56 580 Euro/Dollar 1.3815 Dollar/Yen 105.36 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)
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