Gold near 3-week low on oil, Iran tensions may help

Tag : Metal Cushion
Australia - * Gold near 3-week low on weaker oil
* Platinum rebounds from lows but demand fears linger (Updatesprices, adds quotes)
By Lewa Pardomuan
SINGAPORE, July 30 (Reuters) - Gold fell further on Wednesday,hovering near its lowest level in three weeks after oil pricesdropped, but tensions in the Middle East could spur safe-havenbuying at lower levels.
Platinum bounced from lows but fears of falling demand forautocatalysts from auto makers due to the slowing U.S. economy anda lack of buying interest from jewellery makers weighed onsentiment.
Gold dipped to $916.60/917.60 an ounce from $918.80/920.30 an ouncelate in New York. It fell as low as $913.80 an ounce on Tuesday,its weakest since July 8, also driven by rebounding stocks and afirmer U.S. dollar.
Dealers noted selling from Japanese investors but short- coveringas well as light buying from jewellery makers in other parts ofAsia helped cushion the fall, said dealers.
"Physical buying seems to have recovered a little bit. I think goldcan get support around $900," said Dick Poon, manager of preciousmetals at Heraeus Ltd in Hong Kong.
He pegged resistance at $938 an ounce.
Gold has lost more than 11 percent in value since hitting alifetime high of $1,030.80 in March.
"As long as the Iran issue is not settled, gold and oil prices willnot decrease too much. For gold, $900 is the bottom price at thismoment," said Yukuji Sonoda, analyst at Daiichi Commodities inTokyo.
Iran's president urged developing nations on Tuesday to uniteagainst what he said was bias by the U.N. Security Council, whichthe Islamic Republic accuses of siding with the West in a nuclearrow. The United States and Israel have not ruled out militaryaction if the Iran nuclear row cannot be resolved by diplomacy.
Oil steadied around $122 a barrel, having settled 2 percent lower,and was under pressure from an expected rise in fuel inventoriesamid eroding U.S. demand. Oil was well below a record of $147.27hit on July 11.
Spot platinum rose to $1,740.00/1,760.50 an ounce from$1,735.50/1,755.50 late in New York -- far off a record high of$2,290 hit in March.
Despite lower prices, manufacturers in China and Japan were not tookeen to buy because of high inventories blamed on unsold jewellery,said Sonoda of Daiichi Commodities.
"They are not in a position to buy. They also presume the pricewill decrease further," said Sonoda, who pegged support at $1,650an ounce.
China's platinum imports dropped more than 4 percent to 15,871kilograms in January to June 2008 compared with the same periodlast year, official customs figures show. China is the world'slargest platinum jewellery consumer.
New York gold futures added $0.30 to $916.8 an ounce.
The most active Tokyo gold contract for June 2009 delivery on theTokyo Commodity Exchange fell 30 yen per gram to 3,211 yen.
Spot palladium rose to $381.00/386.00 an ounce from $380.00/388.00late in New York. Silver edged down to $17.29/17.35 an ounce from$17.32/17.38. Precious metals prices at 0724 GMT Metal Last ChangePct chg YTD pct chg Turnover Spot Gold 916.55 -0.30 -0.03 10.07Spot Silver 17.29 -0.02 -0.12 17.06 Spot Platinum 1744.00 2.00+0.11 14.74 Spot Palladium 379.50 -2.50 -0.65 3.13 TOCOM Gold3210.00 -31.00 -0.96 4.90 29237 TOCOM Platinum 6051.00 46.00 +0.7713.34 20057 TOCOM Silver 606.40 -5.40 -0.88 12.09 1036 TOCOMPalladium 1357.00 -11.00 -0.80 0.44 1139 Euro/Dollar 1.5597Dollar/Yen 107.93 TOCOM prices in yen per gram, except TOCOM silverwhich is priced in yen per 10 grams. Spot prices in $ per ounce.(Editing by Ben Tan) Copyright 2008 Reuters, Click for Restriction
Buy Gold Now?
Gold Still Shines