UPDATE 7-Gold trims loss, support holds as US bill passes

(Updates with New York prices, comment. Adds U.S. House bill passage reaction. Rewrites throughout.)

NEW YORK/LONDON, Oct 3 (Reuters) - Gold held onto moderately lower levels after the U.S. House of Representatives voted to pass a $700 billion bill to bail out the U.S. financial system, despite a slide in the dollar against the euro.

Analysts said they thought most investors who wanted to exit gold as a safe haven play if the bill passed likely did so during Thursday’s rout.

“I think people who wanted to get out got out already. They postured themselves ahead of time, because they thought the bill was going to pass and it did. There’s no reason for further flight to quality if you feel the bill is going to pass,” said Scott Meyers, Pioneer Futures Inc, senior trading analyst in New York.

Meanwhile, platinum hit a low dating back to November 2005 at $936.50 an ounce as economic weakness and dismal car sales, especially in the United States, have dampened demand for the metal.

Used in autocatalysts, platinum has fallen about 60 percent from its record high of $2,290 an ounce hit in March.

An early dollar rally undermined most precious metals following release of the September U.S. labor market report, which showed an unchanged employment rate at 6.1 percent.

A sharp 159,000 decline in U.S. nonfarm payrolls in September, well below the 100,000 loss forecast by economists and below August’s revised decline to a 73,000 jobs loss, maintained nervousness in financial markets.

Story: [ID:nN03286538] Table: [ID:nOAT001819].

Though the dollar’s advance hit gold prices, continued economic uncertainty from the sharp drop in payrolls kept support under the yellow metal all day.

Once the U.S. bailout bill passed, the dollar fell against the euro without putting pressure on gold. [USD/]

Spot gold XAU= traded with moderate losses at $828.15/832.15 an ounce by 2:39 p.m. EDT (1829 GMT), down from $838.00/841.00 an ounce late Thursday.

Earlier, spot gold fell two percent to $818.70 an ounce, its lowest since September 17.

December gold GCZ8 finished $11.1 lower at $833.20 an ounce, a 1.31 percent decline on the COMEX division of the New York Mercantile Exchange. It fell as low as $822.50, a 2-1/2 week low, after the jobs data.

The U.S. House voted to approve legislation to rescue banks’ with illiquid assets and ease a credit crunch that had frozen U.S. and other economies. [ID:nN03350591]

Analysts said they thought the bailout would improve confidence, but would mean a weaker dollar and higher gold.

A dollar decline makes commodities cheaper for investors holding 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.

Spot platinum XPT= slipped to $950.50/974.50 an ounce in late New York dealings, down from $960 on Thursday.

About 60 percent of platinum goes into autocatalysts and despite this week’s sharp decline in U.S. car sales, analysts said they think supply shortages will keep prices supported.

“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 labor and rising costs of production,” Barclays said.

Spot silver XAG= was higher at $11.15/11.25 an ounce by 2:51 p.m EDT (1900 GMT) in New York versus $11.07/11.15 an ounce late on Thursday.

Spot palladium XPD= was quoted at $194.00/204.00 an ounce in late business. (Reporting by Carole Vaporean and Pratima Desai; editing by Jim Marshall)