Gold edged higher on Thursday as bargain hunting and physical buying countered volatile oil prices and recent gains in the US dollar, helping boost bullion after a brief dip to near its lowest in nine months. Platinum fell more than 3 percent to its weakest in two weeks, hit by concern over demand for auto catalysts after auto makers reported a 10thconsecutive month of US sales declines and talk that some auto makers sold back inventories.
Gold rose to $802.30/803.30 an ounce from $800.05/801.65 an ounce late in New York on Wednesday, when it extended consecutive losses to a fourth day. It is still well below the lifetime high of $1,030.80 struck in March.
Gold fell as low as $789.05 an ounce on Wednesday, its weakest in two weeks and near its nine-month low around $773 hit in mid-August. But demand from India, the world's largest consumer, and also the Middle East helped stem the fall. Spot platinum dropped to $1,334.50/1,354.50 an ounce from $1,377.50/1,397.50 late in New York on Wednesday - well below a record high of $2,290 an ounce struck in March.
The bencmark contract on Tokyo platinum futures, August 2009 erased early gains and funds sold back their holdings. Romours have been circulating in the market that automakers are selling back their platinum stocks due to poor sales.
US auto sales fell 15.5 percent to 1.25 million units or to a seasonally adjusted, annualised rate of 13.72 million units in August, marking the 10th straight month of declining sales in the US auto market - the longest such downturn since the 2001 recession.
Autocatalysts, used to clean exhaust fumes, account for more than half of global platinum use. The dollar eased against the euro, hovering below an eight-month high hit the previous day as investors trimmed positions ahead of an interest rate decision by the European Central Bank.
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