Gold dips below $800 again, Platinum down 5%

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Gold dips below $800 again, Platinum down 5%Gold dips below $800 again, Platinum down 5%

Platinum slipped more than 5 per cent on Tuesday to its lowest since mid-September last year, on waning demand from automakers and general weakness in precious metals that saw gold dip back below $800.

Gold's fall after rising more than 1 per cent in New York shows the metal remains vulnerable to gains in the dollar. Silver also dropped and palladium struck its lowest level since mid-June 2006.

Spot platinum dropped to $1,315.50/1,335.50 an ounce from 1,386/1,406 an ounce late in New York, with falls in Japanese futures adding to selling pressure. It fell as low as $1,310 at one point.

"EU autommobile production decreases. Both gold and platinum continue to be bearish. Platinum may be below $1, 200," said Kazuhiko Saito of Interes Capital Management in Tokyo.

Platinum powered to a record high of $2,290 an ounce in March after a power shortage in main producer South Africa disrupted mining and triggered supply worries.

It rallied as much as 50 per cent in 2008, but has dropped more than 40 per cent since hitting the record peak due to profit taking, and a slowing US economy that has raised fears of falling demand for autocatalysts, the major use for the metal.

"From the charts, platinum seemed to have returned the premiums from the earlier South Africa crisis and in fact we are almost at one-year lows. I am looking at the $1,200-$1,250 region for support now," said Adrian Koh, analyst at Phillip Futures.

"Looks like a bad week for precious metals," he said.

Gold fell to $791.50/793.50 an ounce from $799.65/801.05 late in New York on Monday, when it briefly regained $800 in a technical rebound, after falling to its lowest level in nine months around $773 an ounce last week.

Gold was well below a lifetime high of $1,030.80 hit in March.

"General sentiment for gold remains weak and I guess we are likely to see more selling on strength. For near-term support, I am currently looking at the $770 region," said Koh of Phillip Futures.

"If we move below that, then the $750s will be a very important level to look at," he said.

The dollar barely budged against a basket of currencies on Tuesday, taking a break from its sharp two-week surge as investors kept an eye on commodity prices for any further drop that could boost the greenback.